Microsoft had big hopes and dreams for Xbox 360 in Japan, given the cold shoulder its predecessor got in that tiny nation, dominated as it is by Sony and its PlayStation 2. Well, cast aside those hopes, Microsoft, because it's official: The Xbox 360 has completely flopped in Japan. After selling just 326,000 Xbox 360 units during the launch period last week, Microsoft set the kind of record it never wanted to set. Xbox 360 actually sold fewer units during its launch even than the doomed original Xbox did, as that prior console sold 556,000 units when it launched in Japan 3 years ago. Likewise, Microsoft was able to sell only about 30 percent of the consoles it offered to the Japanese market, while Xbox 360 completely sold out, and instantly, in North America and Europe. What this means is simple: Even though Sony's PlayStation 3 won't go on sale for several months, it's already sewn up Japan, the third largest video game market in the world. Back to the drawing boards.