Appearances do matter
You know, it's probably the hardware issues and image that the Xbox has that's killing it in Japan, not the games. For Microsoft to see any kind of success in Japan, it needs to pull a Nintendo, and better; it's needs to pull everything off right, in the right sequence, at the right time.
What are the issues? Image, really. Where does that stem from? Well, there is, as some people have pointed out, the image that the Xbox carries from being abroad. Add to that the image western games have.
What image does the Xbox have, being from the U.S.? Well, to answer that correctly, we have to see what the predominant Western games are, or at least the types. What is (commonly) perceived as a Western game?
Well, it'd probably be a shooter or a sandbox type game that involves some sort of overt, in-your-face violent, like GTA or Halo. This is the perception of Western games, in all likelihood. Hell, in the West, that is the perception of videogaming; it's all guns and killing things.
Now, add to that the stereotype of the American in the East. It's probably some blond/brown haired, blue eyed muscled dude who, in contrast with his similar European cousins, loves guns and big cars.
Combine these two images, and you get a console that does not fit Japan at all. Japan does not mind violence, as long as it's cartoonized. Yes, most games contain violence. Hell, Mario technically does stomp his enemies to death. It's presented in a manner acceptable to the Japanese (and most people everywhere) whereas they just might find that giving someone a headshot that you yourself aimed in first person disagreeable. Or pressing "X" over and over to beat someone to death with a bat, after which you make off with the money the person dropped.
Is this true of all western games? No. But this is probably the popular perception of Western games.
It's not a problem from without, but a problem from within.
Well, there is a market for everything. Hell, look at some of the weird things Japan offers. However, remember that Japan is a land of technology, and they are a world economic powerhouse based on their ability innovate and create solid technology, from a software and hardware standard. This means that technology sold there must work.
The Xbox 360 has a reputation for failing. In consumer electronics, where a 5% failure rate is considered high and borderline unacceptable, there are reports that the 360 nears a 33% failure rate, and a probable 100% failure rate for all pre-Falcon units.
Outer images and inner failings
So, we have a console with these images:
It has
-games in genres with motifs that Japan does not like
-weak hardware (build quality)
"But the PS2, good sir, was infamous for its DRE errors! I do believe I have found, in fact, an error in your assertions!"
Ah ha! But the PS2 was replete with the games Japan does so dearly love, and it had the benefit of coming off a wildly successful predecessor. The Xbox 360 is coming off a system that sold abysmally, had few games to attract the Japanese crowd, was famous for being big, and had been cut off early, in terms of support.
The big "What if?"
What would the 360 have needed to pull in PS3 numbers? (Cause, let's face it, if the PS3 is doing what it is, the 360 probably wouldn't fare much better)
-A launch filled with a good amount of Japanese oriented games for all people, from otaku to their sisters, and perhaps a game that mom and dad can enjoy on occasion.
-A steady diet thereafter of decent games, and with a smattering of big hits to grab media attention.
-Rock solid (Falcon or better) 360s. Microsoft would have had to funnel all their first Falcons there, if they had them at the time.
-Commercials showing pachinko games, JRPGs, sims, SRPGs, platformers, racers, and the quirky games. It needs to yell "WE ARE THE SPIRITUAL SUCCESSOR TO THE PS2." Ads selling HD and Live are lost on the Japanese; they don't value HD as much as GAF thought they did, and there's no need for Internet when you've got arcades.
So, to say that the 360 is not selling because it's a foreign console in a foreign country is correct, but to assume it's xenophobia is not. It's simply that a combination of factors, from perceived images to various missteps on the foreign company's part, has prevented it from achieving any sort of success.
Have any foreign companies done well in Asia?
Foreign companies have done well in Asia. Why have these particular companies done well? In China, there's a western furniture company that's done incredibly because they've done something in tune with Chinese culture. They allow Chinese to go in the showrooms, and use the furniture as if it were their own. Lie on it, use the desks for work, they provide outlets for computers, wifi for laptops. They have playthings for kids in the kids section. They know that the Chinese customer likes to touch before they buy, and because they were sensitive to that cultural point, they rake in the dough.
Again, in China. KFC is the biggest foreign fast food company. Why? Because of their intelligent marketing. It's targeted at the moms with an only son, and a grandmothers with one grandsona. They are told that, if they want their only son to grow up strong and healthy, they eat KFC chicken. The KFCs have a strong family atmosphere, with giant images of happy children eating KFC.
Bold text: The next gen vantage
You guys want bold or somethin'?