I don't know how much the rest of you know about Japanese culture (I'm an expert), but honor and shame are huge parts of it. It's not like it is in America where you can become successful by being an asshole. If you screw someone over in Japan, you bring shame to yourself, and the only way to get rid of that shame is repentance.
What this means is the japanese public, after hearing about this, is not going to want to purchase FFXIII for either system, nor will they purchase any of Square's games. This is HUGE. You can laugh all you want, but Square has alienated an entire market with this move.
Square, publicly apologize and cancel FFXIII for 360 or you can kiss your business goodbye.