It just hit me!
MS needs to buy (or partner with) Nintendo.
Japan sales - solved
Casual market likes and dislikes - solved
handheld market (hello win mobile 7 games) - solved
broad software appeal - solved
Japanese developer support - solved
Iconic vg characters beyond master chief - solved
What Nintendo would get out of the deal:
Funding - solved
Network (live) - solved
Hardcore gamers - solved
Hardcore hardware - solved
Network services (netflix, facebook, zune, etc) - solved
Kinect (wii interface evolved) - solved
MS might want to wait it out for the price to get a bit better, but working something out before they drop wii2 would be a good idea.
That's how an American company can succeed in Japan.
If you were too see what you just said from outside of the USA (btw America is a continent...someone call Miss Teen USA) it would be be no wonder why people (not in Japan) would see another Arrogant American stereotype when refering to a US monopoly like Microsoft.
The reality behind your thinking would not hold water given the way Microsoft seems to have in breaking purchased developer's sense of identity basically Nintendo would become a shell or a shadow of its former self... then again not that you would give a care about Nintendo.
But MS started this gen in Japan with some Japanesse grown games from big Japanese names, and they didn't get very far. That's clearly not enough.
Again the AA rears its ugly head, that was a mistake, MS should have hired new talent to make new ip instead of going after big publishers/devs they were on the right track in a way with Xbox 1 but lets be realistic, there was no faith in that console and not so good faith has been established with the 360.
Without any studios of their own, it's just that. Some games from some japaneese big names.
Sure, the 360 might be fine hardware at a nice entry-pricepoint, but the game-portofolio from a consumer-standpoint in Japan is at a distant last place, and I don't think that's just because of xenophobia, it might have something to do, that Microsoft don't aim for that market at the moment.
Those japaneese people who 'jumped in' back then when they got Lost Odyssey, and Blue Dragon in a span of two years; don't you think they would have liked better if MS had started up two or three of their own studios wich could make more games targeted them, so they got something else to play, besides those two-three JRPG's wich Mistwalker commisioned?
All I can think of the last two years, is a couple of shmups and a idolmaster-game wich were console-exclusive 360-games in Japan, so perhaps those who took a wait and see aproach before jumping in, weren't necesarilly doing it because of xenophobia.
But because they didn't thrust MS to provide them with more games.
Has there been any discussion into how those early adopters in Japan felt when they eventually realized the quality of the product? basically noise, errors, lacking features the other consoles had since day one, having to pay for an online service that is flooded with first person and third person buff bro shooters, those Red Rings being experienced and the frustration that followed from a dead console... these things need to be considered before fingering xenophobia and the general belief that Microsoft's console is somehow entitled to sell bucket loads in Japan.
Dreamcast(box)360
Dreamcast has nothing to do with XBox 360 other than being rushed to market too soon after making excuses and dumping or pulling the plug out of the previous console extremely prematurely with false promises of cheap, easy to develop for power.
Excuse me but that blabla, why no japenese studio that sell mostly in Japan pushed out something in Japan? MS has to subsidize for every game over there? On top of it it's easier to get good result out of the 360, development would been than on the PS3.
It's non sense.
I'm still waiting for some one to clearly state those two don't know what they are talking about, or that simply the fact that they have to talk about it is irrelevant..
http://kotaku.com/5442274/square-enix-says-japanese-retail-prejudiced-against-western-games
http://www.eurogamer.net/articles/2010-09-03-capcoms-keiji-inafune-interview?page=3
The Microsoft strategy is more about taking all of those games that became famous on "PlayStation" brand console platform rather than generate their own its alot like a rich arrogant kid using money to become popular by buying the attention of your friends or fellow classmates.
All it has really done is disrupt the development of games traditionally developed on the "PlayStation" console that combined with generally western gaming media mentallity that every game HAS to have an online multiplayer mode or risk being penalized in the review scores and its no wonder why original or fresh gaming experiences are very rare or if they exist they get somehow black listed and panned with weasel review words like "difficult or hard"
I really do not undertand why Microsoft or their XBox 360 console needs to be entitled to dominate or sell everywhere, including Japan, its only going to do as good as it should and so far according to the numbers it has done well despite Microsoft rather arrogant policy of money buys your soul.
The quality of the console and then the games speak volumes specially considering the diversity by percentage and the freedom game developers would have instead of simply chasing money and where da money at and oh that "genre" sells lets make more of that mentality.
Similar problems or issues existed back the Xbox 1 days with seeminly less focus on innovating with variety of games so its no surprise that they have not changed their attitude.
Personally I was and still am (even though I eventually made a choice) dissappointed in how Microsoft simply and intentionally or even pourposely held back console technology by rushing gamers to buy into a new gen of consoles in 2005 when they clearly new all the details reguarding their XBox 1 misshaps, forcing Sony and Nintendo into "jumping in" or risk 2 plus years of a potentially different console market and this is clearly where the idea of xenophobia falls appart because both Wii and Playstation 3 are clear, competitive answers to a new console because neither Sony or Nintendo were going to risk the market.
If xenophobia really did exist in Japan then Sony would have clearly waited 3 to 4 years with Nintendo following suit as they were not going to risk exposing their card (wiimote) early and XBox 360 sales numbers would bet at one quater of their current Japan "established base" of currently active consoles.