LONDON, 17 Oct, 2014 (AFP) - Northern Ireland's McDowell had reached the quarter-finals of the event on his debut in 2011, the final in 2012 and was crowned champion last year, while his opening day victory over Alexander Levy gave him an overall record of 15 wins from 17 matches.
But the European Ryder Cup star and former US Open champion, who had already been beaten by Mikko Ilonen on Thursday, will miss out on the knockout stages for the first time in four appearances after another disappointing display against Luiten.
Patrick Reed of the United States gained a small measure of revenge for the Ryder Cup defeat by knocking Welshman Jamie Donaldson, who helped Europe retain the trophy at Gleneagles last month.
Scotland's Stephen Gallacher had already been eliminated after losing his first two matches, leaving Victor Dubuisson and Henrik Stenson to fly the flag for the victorious European team this weekend.
Stenson and Reed will enjoy a re-match of their Ryder Cup singles clash in the semi-finals if they can see off Jonas Blixt and George Coetzee respectively in the last eight, with Dubuisson taking on Mikko Ilonen and Luiten facing Pablo Larrazabal in the other quarter-finals.
"Henrik will have revenge on his mind but I will too," said Reed, who beat Stenson on the 18th at Gleneagles to finish as the top US points scorer on his debut.
"I might have the 'W' in the singles but he has the cup and I don't."
The best golf of the day came in the match between Blixt and England's Paul Casey, who both finished 10 under par and went into a sudden-death play-off to decide who finished second to Reed in their group.
A par at the first extra hole was enough for Blixt to advance after Casey's approach found water guarding the green.
Stenson made sure of his place in the quarter-finals in style by holing his second shot to the 17th to beat 2013 runner-up Thongchai Jaidee of Thailand 2 and 1, while Coetzee advanced despite losing by the same score to the already-eliminated Francesco Molinari.
Results from the third day of the European Tour World Match Play Championship at the London Golf Club, Kent, England, on Friday:
Patrick Reed (USA) bt Jamie Donaldson (WAL) 3 and 2
Stephen Gallacher (SCO) bt Victor Dubuisson (FRA) 2 and 1
Jonas Blixt (SWE) tied with Paul Casey (ENG)
Pablo Larrazabal (ESP) bt Shane Lowry (IRL) 2 and 1
Henrik Stenson (SWE) bt Thongchai Jaidee (THA) 2 and 1
Joost Luiten (NED) bt Graeme McDowell (NIR) 2 up
Mikko Ilonen (FIN) bt Alexander Levy (FRA) 1 up
Francesco Molinari (ITA) bt George Coetzee (RSA) 2 and 1