It's a simple reason. Japanese gamers and game developers don't like the Xbox systems; it isn't a system that has caught on with the people in the Land of the Rising Sun. It's not hard to understand the reason why it hasn't either. From Day One of the original Xbox, Microsoft went into the country trying to woo big Japanese developers like: Capcom, Sega, Bandai/Namco, and so forth and it could have worked until they seemed to take too much of a gung-ho America is best attitude towards the console. That kind of attitude will definitely not work in a country that has tremendous national pride and has a tendency to be slightly xenophobic like Japan is. It is an amazing place but like all countries, including our own, it has its faults. No one appreciated an America first, Japan second attitude of the speech on the console and thus Microsoft suffered because of it and the original Xbox sold abysmally in Japan.
Then came the Xbox 360. We thought things may have picked up with games like: Lost Odyssey, Blue Dragon, Etrian Odyssey, and Tales of Vesperia on the Xbox 360 but alas no that was not the case. It isn't popular in Japan and thus even though those Japanese developed games including Blue Dragon with concept artwork done by Akira Toryama, of Dragonball fame, himself still it did nothing for the consoles sales over there and thus Japanese developers continued their tendency to hold back developing for a console that isn't popular for their population. Which, in turn, meant no big Japanese titles for the Xbox system over here.
Now we are at the current system, the Xbox One, and headed near November 7th and the 3rd iteration of the console: the Xbox One X. We have still yet to see any big Japanese developed titles head to the Xbox and it doesn't look like it will be the case because just like its predecessors it is not popular in Japan but this time mainly because of its games lineup. If you look at Microsoft you see sports games, a plethora of shooters both first and third person, some action games and other titles, however the console exclusives are lacking and don't appeal to a Japanese market and the major titles exist on both consoles thus the Playstation 4 will continue its dominance.
"A lot of Japanese gamers really seem to like games such as Persona 5 or Nioh. If we plan on doing better in the Japanese game market we want to release games that the average Japanese gamer will enjoy. We plan to talk with many other developers in order to bring more games to the Japanese market, we were happy to announce Final Fantasy XV on the Xbox One which made me extremely happy and as mentioned we plan on a lot more connections!" This comes from the mouthpiece of Xbox himself, Phil Spencer, yet they have done little work or put little effort in to bringing games of that nature to their system. It is also not JUST big Triple A titles like those that Japanese gamers or North American gamers that like Japanese games prefer but those are two random big examples popular on a competitors system.
With the system not being popular in Japan, why would Japanese developers bother with it, why bother to release games on a console that does poorly in their own country and then hopefully they MIGHT get ported overseas to North America. It's a double edged sword, they have to bank on the game selling well in their own country on a system that no one likes and then pray that it does well enough on that with enough interest in North America to come over. And that doesn't exist, that's why you don't see many Japanese games on the Xbox One in North America. Even though Spencer said making more connections, Microsoft has been making connections to the Japanese market since the original Xbox with no success, they have a long way to go to prove its viability as a platform for these Japanese developers to make money in both Japan AND North America. Sony has it much easier, with its Japanese popularity smaller niche titles from Japan are able to make it over to North America because they sell well overseas so why not take a small chance and see how they fair in the North American marketplace.
Sony allowing for those niche titles to flow over from Japan has allowed for some smaller Japanese firms to even set up branches in North America, like NIS which has set up NIS America, which was critical recently of Microsoft in saying:
"Honestly speaking, Microsoft's approach to Japanese games hasn't been very supportive," NIS America president and CEO Takuro Yamashita told MCV. "Microsoft, you know, for Japanese games, there's still a very niche element to them, no matter what it might be. Microsoft also has a minimum order quantity for their games, and their whole structure isn't really geared toward niche games or smaller games like Japanese titles, so they're not really supportive of Japanese games or developers."
Articles I've read have said that E3 centre stage having Bandai/Namco show off Dragonball FighterZ at the Microsoft press conference rather than the Sony one says otherwise about Japanese support of Microsoft or Microsoft supporting Japan, however, the hype for that console isn't there. Most people seem to want that game on the Playstation 4, the competitive scene will be on the Playstation 4, because the ArcSys games always do PS4. Another of their fighting games BlazBlue: Central Fiction they attempted to sell on XB1 and it flopped while selling well on PS4 in Japan and North America respectively.
It's unfortunate because for people, including friends of mine, who never have nor plan to own a PS4 I know that they are missing out on some of these fantastic games which is a shame. Hopefully Microsoft does more to bring these kinds of games to the Xbox, it will be a task though since the company doesn't cater to Japan at all so why should Japan cater to Microsoft and North America when Sony and Nintendo do that for them already and have for years now.
UNTIL THEN........I THINK PLAYSTATION HAS A HOLD OF THE JAPANESE MARKET