The XBOX 360 Core System has been available in the United States and Europe since its Q4 '05 launch. In the United States, the XBOX 360 Core System forgoes the 20GB hard drive, chrome trim, wireless controller, Ethernet cable and XBOX Live Headset. The Core system also features a Composite AV cable instead of the Component HD-AV cable.
Though I personally don't see why someone in Japan would be interested in a cheaper, but dumbed-down version of a console that is already selling poorly, MS thinks otherwise. Will this help them? The price, at least, can't be beat. Factoring in the exchange rate, the cost of the console is only about $86 USD, making it by far the cheapest next-gen console available. Of course, what good is a house if it doesn't come with a roof?