It's a PR nightmare over there, and they aren't going to recover from it. In Japan, you generally don't announce mass firings of people unless much humility is shown and you aren't trying to spin it as a good thing. There's the issue of Japanese gamers spending their lives with Nintendo, Sega, and then Sony, with this US company trying to buy their way in by waving things like Blue Dragon and Lost Odyssey around. For most, that's not enough. The way they advertise doesn't speak to the Japanese culture at large, and most know that they don't have a space to accommodate the Kinect anyway. None of the X1 exclusives have tried to speak to the Japanese audience, they aren't exactly lining up for CoD: Ghosts over there pretty much.
On top of all that, I'm pretty sure starting off the generation by saying "you're a tier 2 country, you're not as important to us as NA and other regions, and you have to spend extra for this camera whether you can use it or not, and by the way please don't make that sound negative" isn't the most intelligent way to get Japanese gamers interested in the X1.