Microsoft's policy regarding the exchange of MS Points for currency leaves Japanese developers with less revenue than their international peers, according to G.Rev boss Hiroyuki Maruyama .
"A strong yen and a weak dollar is very damaging to us because XBLA and DLC are ‘export products.’ That’s why Japanese developers avoid making games for Xbox 360," he said.
"When we released Strania on XBLA, the rate was ¥80 per dollar. If Japanese people buy our game in MSP, we receive in dollars."
What Maruyama means is that Microsoft pays XBLA revenue in US Dollars. If a game costs 1600 MS Points, the developer receives a cut of the equivalent US dollar price for those points - $20. But in Japan, 1600 MS Points costs about $25 when converted to US dollars.
When the US dollars are converted back to yen, the Japanese developer then receives its cut of a significantly smaller amount, which when multiplied by units sold represents a significant loss.
Microsoft has not issued a statement confirming or denying the policy, but XBLAFans said other Xbox Live developers verified it under condition of anonymity.
It's probably worth noting that the Xbox 360 is, in general, a weak platform in Japan, and may be unattractive to local developers for a number of related reasons.