Extracts from Wen's interviews follow.
"I think it will be exceedingly difficult for Microsoft to succeed in Japan, due to cultural bias against American/foreign companies that threaten established Japanese companies."
"To crack this market, they must improve both their first- and third-party offering."
"... Japan is likely not very important, as it was never likely to become a major market for the 360."
"I don't think that this is [Microsoft's] fault. They have tried as hard as they can to succeed, but cultural bias has precluded success. I don't think that they will be able to fix things without an alliance with a Japanese company."
"I don't feel that the Japanese market ultimately matters to Microsoft."
"For Microsoft, the Xbox 360 is a marathon race for the living room. So they are in this for the long haul."
"I am not sure Microsoft did anything horribly wrong with Japan."
"If Microsoft has done anything wrong that needs to be fixed, it is a lack of understanding of the Japanese market."
"Microsoft has created a lifestyle product in the 360 and much of the lifestyle it caters to is U.S.- and U.K.-based."
"They definitely need Japanese developers for Japan-based games. I don't think they need it for games outside the Japanese market."
"For all the talk of supporting the Japanese market with relevant titles, the [Xbox 360] launch list -- and even today -- shows a dearth of titles that will entice the Japanese game player."
"While Microsoft does not need to be number one or two in Japan -- and ABI doesn't expect them to be -- they really need to grow their market share to at least a respectable number, as this is important to the developers who live and work in Japan."
"... Japanese developers realize that a good chunk of their success is reliant on North America and Europe, and that the Japanese market, while still important, has been shrinking over the past few years. So, regardless of how Microsoft fares in Japan, Japanese developers will continue to support the Xbox 360 in the other geographies."
Hat tip to Gen Kanai's weblog where I came across a link to this article.