I don't think Microsoft really cares if this doesn't sell a million units - this is an image thing for them. Like the Xbox itself, they're willing to take a los to establish themselves in the market. With Blue Dragon, Lost Odyssey and the like, they're trying to prove that the system can appeal to gamers who owned a PS2 last generation and their system is more than just shooters and sports games.
I do agree that the marketing could be a lot better, though. I think there's potential here to really do well. I will say that they're at least spending more on Lost Odyssey than Blue Dragon.