The entry-level offering goes on sale March 6 for about $260 - about a fifth less than the least expensive Xbox 360 now costs in Japan. The stripped-down version went on sale in the United States late last year for $279.99.
The Xbox 360 has been struggling in Japan against rival products the Wii and PlayStation 3 from Japanese manufacturers
Microsoft doesn't give a regional breakdown but says it has sold 17.7 million Xbox 360 machines globally so far.
Nintendo has already sold more than 20 million of the newer Wii worldwide, wooing newcomers, including women and the elderly, with easier-to-play games and a game controller that directs on-screen movements in part by being moved around itself.
Sony has sold 10.5 million PS3 machines worldwide.
Wii and PS3 both went on sale about the same time in late 2006, a year after the launch of the Xbox 360.
Tokyo-based Enterbrain, which publishes game magazines and tracks video game sales, says only 257,800 Xbox 360 consoles were sold in Japan last year, in contrast to 1.2 million PS3s and 3.6 million Wiis.