I'll just let the number speak for themselves:
Microsoft's Xbox and Xbox 360 game consoles accounted for less than 1% of Japan's game console market in July. Sales of the Microsoft's next gen Xbox 360 during the week of July 17-23 totaled only 1,472 units which is nowhere near to 22,288 units of the PS2 and a staggering 262,453 units for the Nintendo DS Lite. The Top 10 list of games played in Japan is dominated by the Nintendo DS with six games. On the other hand no title for the Xbox 360 even makes it to the top-50 list.
-- Xbox 360 sucks in Japantagged: microsoft, gaming
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