Microsoft Shall be Launching The Xbox One In China During September.
After successfully manage to pass a decade-old ban on video game consoles, Microsoft has recently announced that they shall be launching the Xbox one in China during this coming September.
This includes a potential 500 million gamers as potential customers for the Xbox One, giving Microsoft some highly needed expansion for its console system. Game consoles could only be obtained in China through the use of the black market, but Chinese government has finally decided to lift the ban.
“This is a historic moment in our partnership as we work toward the first official Xbox launch in China,” said Yusuf Mehdi, the Xbox’s chief marketing and strategy officer. “Xbox One will also be the first system of its kind to launch in China.”
Mehdi stated that gamers tend to make up a third of China’s population, which is fare greater then the entire population of North America. China’s game market is mostly consisted of PC gamers, many who tend to play at Internet cafes with their friends. Total revenues were $13 billion during 2013, up by 38 percent from a year ago.
“Gamers in China have shown they love gaming — mostly on PC, mobile and online — and game developers in China have been delivering innovative games for years,” Mehdi said. “Creators and gamers alike have eagerly awaited a new generation of entertainment experiences in China.”
Microsoft needs to secure a position with China if they wish to compete against the Sony Playstation 4, which costs $400 to the Xbox One’s own $500. Sony has manage to sell more than 7 million PS4′s to date, compared to that of Xbox One’s 5 million shipped towards retailers. It isn’t really that clear on when the PS4 will begin its debut, but it seems that the console will most likely receive approve within the country as well.
“I think it’s an exciting opportunity, and think they will sell a lot of hardware,” said an analyst at Wedbush Securities,Michael Pachter . He estimated Microsoft could potentially sell 10 million units in China.
Although, Patcher has begun to express some concerns.
“But am not sure how the software will work,” Pachter said. “They are going to have to come up with a business model where they are protected from piracy in order to make any money on software. They are partnering with Chinese companies to develop tailored content, which might not even be game content, and I think that might make this entire effort successful.”
During past times, China’s government had approved the PC and rejected console’s due to PC being able to be labeled as educational, while consoles were considered a distraction for children. Mehdi pointed out that Xbox One works for games, entertainment, online education, and fitness. Those broader uses have made it more palatable to China’s bureaucrats.
“Launching Xbox One in China is a significant milestone for us and for the industry, and it’s a step forward in our vision to deliver the best games and entertainment experiences to more fans around the world. Enwei Xie will lead Xbox China as general manager, bringing years of Microsoft experience both in China and abroad,” Mehdi said.
A subsidiary of Shanghai Media Group, BesTV, shall be helping Microsoft launch the console within China. Microsoft had previously formed a joint venture, E-Home Entertainment, with BesTV. This permits E-Home PC devices to be sold in the Shadhai Free Trade Zone of China. It will also be used to sell the Xbox Ones in China, and to allow developers to sell their games in China.
“If you are launching a global entertainment console, you should launch in China,” said P.J. McNealy, analyst at Digital World Research. “With the door open, this makes a lot of sense. The Chinese market is getting bigger and more affluent. China surpassed the U.S. last year as the No. 1 buyer of new TVs.”
An analyst at IHS technology, Piers Harding-Rolls, has estimated that 89 percent of China’s $12.3 billion in revenues for games during 2013 were connect to the PC. The remaining 11 percent came from mobile and tablet devices.
“The historic ban on consoles means that TV gaming remains a niche activity centred on gray imported consoles generally used for pirated software and more recently games available through IPTV services,” he said. “On the face of it, the size of the market, the scale of the population, and the wide interest in gaming makes China a very interesting market for console companies. But China is a unique market where consumers have no entrenched understanding of console gaming and are not used to gaming in the home on TVs.
“I don’t expect sales fireworks at launch, but with its partner BesTV, which has access to local content, a large addressable market of existing IPTV users as well as marketing and distribution expertise, Microsoft is giving itself a good opportunity to gain some advantage over both Sony and Nintendo.”