Microsoft starts 'game console war' in China

Launch of Xbox One may bring in big-name rivals Sony and Nintendo as sales ban is lifted

PUBLISHED : Wednesday, 30 April, 2014, 4:03pm
UPDATED : Thursday, 01 May, 2014, 12:42am

Consumers on the mainland, the world's second-biggest games market by revenue, are poised to witness the belated launch of a "video game console war" there as Microsoft starts domestic sales of its new-generation Xbox in September.

Xbox One, the software giant's all-in-one games and entertainment system, will be the first device of its kind to be introduced on the mainland after the central government lifted a 13-year ban on foreign video game console sales with the opening of the Shanghai Free Trade Zone (FTZ) in September.

Microsoft and local joint venture partner BesTV New Media, a subsidiary of Shanghai Media Group, announced at the Xbox launch in Shanghai yesterday that they want local developers to build, publish and sell their games on the device not only on the mainland, but in other markets where the console is available.

After initial introduction in 13 markets, sales will be expanded to 42 markets, including the mainland, Hong Kong and Taiwan, from September.

Yusuf Mehdi, the vice-president of marketing, strategy and business for Microsoft's Xbox unit, yesterday said the mainland launch marks "a step forward in our vision to deliver the best games and entertainment experiences to more fans around the world". He said there were "nearly half a billion people playing games" on the mainland.

The mainland games market grew 38 per cent to 83.2 billion yuan last year, led by online desktop games, according to data from the China Games Publishers Association.

Apart from the expected entry of Sony and Nintendo in the market, mainland brands, including ZTE and TCL Multimedia Technology, are expected to challenge Microsoft.

Huawei Technologies the world's second-largest manufacturer of telecommunications equipment, already released its Tron console that runs on Google's Android operating system.

Sandy Shen, director for consumer services at technology research firm Gartner, said: "There is already a user base that is very keen on console games, so we expect the availability of more brands and models will help sustain and grow this segment of the market."

Since 2000, mainland consumers managed to buy the three popular game platforms - the Xbox, Sony's PlayStation and Nintendo's Wii - through the grey market.

Research firm Niko Partners estimated that there are about one million game consoles sold through the mainland's grey market each year.

Newzoo, another games-focused research firm, said Microsoft and Sony "could also be successful in China if … more games are offered free-to-play with in-game payment possibilities".