INTERVIEW-Microsoft raises Xbox 360 forecast for Japan

*Raising Xbox 360 shipment forecast for Japan on brisk demand

*Namco Bandai to launch "Tekken" for Xbox 360 as well as PS3

(Adds details, background)

By Kiyoshi Takenaka

CHIBA, Japan, Oct 9 (Reuters) - Microsoft Corp (MSFT.O) said on Thursday sales of its Xbox 360 video game console are surpassing its own projections in Japan, and the company is revising up its shipment forecast for the country.

Japan, the home market to two of its biggest rivals, Sony Corp (6758.T) and Nintendo Co Ltd (7974.OS), had until recently been a weak spot for Microsoft's game business.

But Microsoft in September cut the price of its Xbox 360 in Japan, helping the game machine outsell Sony's PlayStation 3 in the month. That was the first time the Xbox 360 has beaten the Sony console in monthly sales in Japan.

"We've done better than we forecast. We are finding that we have a shortage of hardware," John Schappert, Microsoft's corporate vice president overseeing its online game services and game software, told Reuters in an interview.