I think the solution is quite simple, actually.

The 360 had an bad start in Japan because of its lack of quality software. There just wasn’t enough Japanese developer support. The launch line up was quite sad. What they should’ve done, was build with Japanese developers from the start to work on fresh exclusives, fresh originals, and bona fide classic franchises. Launching the 360 in Japan without any Japanese developed titles, was like launching a present-day portable music player without MP3-file support; simply put; there was nothing to play.

The 360 is American in origin, so it really needs to study its Japanese market. MS really needs to do its homework on this one. What is popular in Japan? What moves units? What do gamers want?

Maybe it’s not too late. They can still work with the trusted guns, like Konami, Capcom, Square, Namco, etc. to bring out some good stuff. No, we don’t want stuff like Ninety Nine Nights. That felt like some watered down, diluted, Square stepchild title that wanted to pass as next gen. Oh wait. That’s exactly what it was. N3 didn’t have any original characters, no engaging gameplay, no engrossing storyline, no evolution in game design, or other any redeemable qualities. The game was weak. Microsoft needs to stay away from stuff like this, and focus on the hard hitting, crowd pleasing titles. Case in point: the 360 gets Ninety Nine Nights, while the old PS2 gets FFXII. FFXII sold millions, Ninety Nine Nights didn’t sell as many.

I think the difficulty here is that Microsoft wants to push next-gen gaming philosophy when all Japan really wants to do is play tried / true, correctly evolved, trusted, and sound quality game play. That isn’t to say that next gen doesn’t have any stay in Japan, but they need to have a foundation first. Develop quality, Japanese based games first, and then high-light that line up with cutting edge titles afterwards, like Lost Planet. Look at the DS Lite, or the Wii. Not exactly eye popping in terms of visuals, but its all about the trusted game play. And that stuff moves units. The recent sales spike caused by Blue Dragon proves all of this. AA quality titles within known genres / developers will sell consoles. Work on this stuff first, lay that foundation, and they can lay on as many next gen titles without worry.

The XBLA platform is a great idea, but it also suffers from a weak line up of games. For one, is the 50MB size limit hurting or helping Microsoft? To be certain, I think the size limit is hurting Microsoft. Sure, it allows for gamers to transport the game around, but honestly, who really uses this stuff? They need to do away with the size limit and feature some real games on XBLA. Offer some real content, like Megaman, Street Fighter Alpha, Sudoku, Sega classics, Namco classics, Konami classics, Hudson classics, Tecmo classics, Super Dodge Ball, strategy games, etc. Only then, will you have a contender.

Sadly, the 360 can only offer shooters, sports, and action games at the moment, and little else.

To succeed in Japan, the 360 needs a solid base of quality games, must-have titles for XBLA, several next gen titles mixed in, and heck maybe even a smaller, redesigned power supply for the hell of it.

All of that Xbox Live stuff: downloadable media, picture packs, music streaming, etc. that should come second – while they focus on making it a solid game console; first.

Devin, I totally agree. I’ve been gaming long enough (since the good old days of Atari 2600 and NES) to see when companies secure exclusive rights to certain games or franchises. I still have fond memories of SF2 and MK I (even though it had sweat instead of blood, the graphics weren’t bad, but MK II made up for it) on the SNES.

Like you, I sure hope the MGS4 rumor is true. I mean, MG had its start on the MSX/NES; it then went on to have numerous sequels on Sony’s systems. Why not make the move over to Microsoft?
Whether the rumor is true or not, GTA4 will be on both the PS3 and XBOX 360 this year, and as you’ve probably heard, VF5 will be on the 360 as well.

However, I don’t agree with your statement: “They [Microsoft] have no chance of winning this gen,…”
Personally, I think the battle has just begun, and it will take a few years before we see a clear winner. MS already have a few hits that were popular in Japan — Dead Rising and Blue Dragon to name a few. Lost Planet will most likely be a hit in both Japan and the US, which is suprising to me, since the Japanese don’t seem to like FPS.

So, only time will tell which console will win the war.

I beg to differ — it might be very well possible. If you are old enough to remember, Final Fantasy and Metal Gear both had their start on the Famicom/NES, with a few sequels to FF on the SNES/Super Famicom. It wasn’t until the PlayStation (One) that both franchises were made for Sony’s system.

Also, not to start a flaming war, but where did you read that Konami and Square-Enix (formerly Squaresoft before they merged with Enix, publisher of the awesome Terranigma) are 80% owned by Sony?? So you’re saying Sony allowed Square-Enix to make FF games for the DS? Last I checked, they are their own companies.

I think anything’s possible with regards to which system gets exlusives. Sure, there’s a high probablity it won’t happen, but if you’ve been keeping up with recent gaming news, it’s rumored that MGS4 will be released on both PS3 and XBOX 360.

They started this process lat in the game of the XBOX1 and the advancements have helped the 360 get off the ground a little faster. With a 360/2 definitely in the works in Redmond, I can predict a very bright future for the company in the land of the rising sun. Just keep giving full (cheap) dev kits to all those developers and starting up the full out Japanese-viral marketing (mobile phone ads, billboards, handouts at the disco, etc), as well as loosening up the “attitude” at Microsoft, and Gates & co. should be fine. It seems as though they get this and as long as they continue on the current path in an exponential matter, they should be fine.

In order of importance:
Solid Hardware -> Japanese Developers -> the fostering of innately Eastern genres -> abundance of Japanese friendly content on XBOX live -> viral marketing -> GREAT SUCCESS!