Microsoft in China games joint venture
Microsoft is forming a video-game venture with a Chinese company to capitalise on proposed free-trade rules that would end a 13-year ban on foreign firms selling consoles on the mainland.
The US firm and BesTV New Media, a subsidiary of Shanghai Media, formed a US$79 million gaming venture, BesTV announced in a statement to Shanghai's stock exchange on Monday.
BesTV will invest US$40.29 million for a 51 per cent stake, while Microsoft will put in US$38.71 million for the rest, according to the filing.
Consoles such as Microsoft's Xbox 360, Nintendo's Wii U and Sony's PlayStation were banned in 2000 to protect youths on the mainland from the perceived corrupting influence of video games. They turned to online games, including Tencent's League of Legends.
Game consoles are on a list of items to be liberalised when Shanghai's free-trade zone opens this weekend, according to a draft plan seen by Bloomberg.
The zone would open on Sunday, Xinhua said on its micro-blog yesterday, citing the local government.
"We believe there is great market potential and partnership opportunities here," Joanna Li, a Beijing-based spokeswoman for Microsoft, said. "This is the first step of many to come for Microsoft and BesTV, and we look forward to exploring new opportunities for bringing entertainment offerings to China."
The investment by both parties would reach US$237 million, the filing said.