Platform holder will turn its attention to European market.
Microsoft will target the European market following the Xbox 360's diminishing popularity in Japan.
In an interview with Bloomberg, Aaron Greenberg, Microsoft group product manager for Xbox said Europe was the company's top priority.
He said: "The No. 1 objective is to win on a global basis and that may mean winning some markets and losing others. Europe is our priority focus right now."
The comments will obviously disappoint what Japanese Xbox fans there are, and further strengthen the belief that Microsoft's hopes in the second biggest game market in the world are doomed, despite price cuts and high-profile exclusive RPGs such as Blue Dragon and Lost Odyssey.