In the recent fall update, Microsoft expanded player profiles to include things like where we live. In Japan, if players tried to enter the Japanese kanji for Takeshima ("Bamboo Island"), a group of small islands in the Sea of Japan, the characters were not recognized. Both Japan and Korea claim ownership of the islands: Japan says its part of Shimane Prefecture, while Korea claims its part of North Gyeongsang Province.
The island only has like twenty or so permanent Japanese residents. There are more Korean residents. So maybe Microsoft is just hoping to side-step a very, very controversial issue of which country actually owns the islands by not letting anyone register the Japanese "Takeshima". Well, no. If you typed the Japanese kanji for "Dokdo," the Korean word for the islands, Xbox Live would accept it. That's right, Xbox Live Japan wouldn't accept the Japanese name for this area, but would accept the Korean name for it. And that inadvertently indicates which country Microsoft thinks owns the islands! The internet flipped out with comments over at popular site Nico Video hitting a thousand. Commenters called this "horrible" and "awful." Microsoft has since said it was a mistake in the new update and is correcting the error. The funny part? In the news clip after the jump, the caster continually refers to the Xbox 360 as the "popular" Xbox. "Popular" in America, that is!