When I first layed eyes on the boxart, I read it as Faxan-A-doo (http://soundcloud.com/james-questmaster/00-faxanadoo), for some reason expecting it to spell out Faxanuda (http://soundcloud.com/james-questmaster/01-faxanuda). Then, for the longest time I pronounced it Fax-zanadu (http://soundcloud.com/james-questmaster/02-faxanadu).
Then I discovered it is a portmanteau of Family + Xanadu. I always pronounced Xanadu as Zanadoo (http://soundcloud.com/james-questmaster/03-xanadoo), but still pronounced Faxanadu the same way until realizing it probably should be Fax-zanadoo (http://soundcloud.com/james-questmaster/04-fa-xanadoo).
Funny thing is, I still pronounce it as Fax-zanadu (http://soundcloud.com/james-questmaster/02-faxanadu) in my head. I know this is probably wrong, but in order for my pronunciation of the spinoff game to be correct Xanadu would have to be pronounced Zánadu (http://soundcloud.com/james-questmaster/05-xanadu).
But that also lends itself to another pronunciation: Fax-zánadu (http://soundcloud.com/james-questmaster/06-faxanadu).
To make things even more complicated, does the 'X' retain its 'Z' status? Fazanadu (http://soundcloud.com/james-questmaster/07-fazanadu)
I'm pretty sure it is Fa-zanadu. Just like you mentioned it is Famicom Xanadu, so that only makes sense to me. I've heard plenty of people in the US say Fax-anadu though, and that just doesn't sound right to me at all.
I always pronounce it Facks-zan-a-doo...
Fah-ksah-nah-duh ;D
The Japanese is clearly "fa-zanadoo" but as I kid I remember reading it as "Fax-an-a-doo."
Don't know about the japanese one, but the english one is clearly
Fax - anne - adoo
Last part is pronounced like much "ado" about nothing
:)
I say "FA-SHA-NA-DOO" :)