Takashi Sensui, the boss of Xbox in Japan, has resigned his post.
Sensui will stay with Microsoft, but work at the company's US headquarters instead.
The move comes amid terrible sales of the Xbox One in the country, where the console has performed far worse than predecessor Xbox 360 or the original Xbox.
Xbox One has now shifted 38,461 units in Japan since it arrived in September.
The vast majority - 23,562 units - were sold over its first four days. Xbox 360 sold double that over two days when it launched back in 2005.
The Xbox One suffered the lowest Japanese launch for any home console in recent years - well below Wii U (308k in two days), the PlayStation 4 (322k in two days) and any other machine from the last few console generations.
Sales have since dropped off to just a trickle.
776 Xbox One consoles were sold in Japan last week according to numbers company Media Create (thanks, NeoGAF). In comparison, PS4 sold 12.4k and Wii U sold 9.6k.
Microsoft has publicly remained quiet on the Xbox One's performance in Japan, although one comment from Sensui emerged in October suggesting that the company was not pleased with its progress.
"It's not as though we're satisfied with the current sales state," Sensui said.
"Taking the first step was very important, and as for how to permeate the market from here, we hope to continue to do our best."
Famitsu reports that the top Xbox Japan job has now fallen to Yoshinami Takahasi, who joined the company back in July following more than 25 years at Sony.
Xbox has always struggled to make an impression in Japan, which has, traditionally, favoured other consoles. But in recent years all home consoles have struggled as the market shifts its focus to mobile gaming.
Eurogamer investigated why the original Xbox failed in Japan for a feature published in 2012.