Earlier quoted context omitted.
Malaysian here. We do have a large, extremely devout conservative demographic here, so I can see why Microsoft would choose to be on the safe side. Plenty of foreign artistes were banned from holding concerts here due to perceived lack of morals. On the other hand, our newspapers regularly publish raunchier content without much fanfare. It's a fascinating place really.
It's all about age. Older people impose restrictions on younger people - because they can and enjoy it too. Who goes to concerts? Younger people. Who reads newspapers? Older people.
The result is that Malaysia has a large enough non-Muslim population to avoid becoming a full-blown theocracy like Saudi Arabia, but still have a large enough religious base to be considered a 'conservative' country.