Xan Sabaris/ China Daily
New spin-off company strives to develop a rival for Microsoft's Xbox 360
BEIJING - Chinese PC maker Lenovo will go head-to-head with the big boys in the video game console market, looking to snatch away market share from the likes of Microsoft, Nintendo and Sony.
On Aug 9, a team of some 40 Lenovo software engineers was spun off from the Lenovo Group to develop and market the "eBox", a platform similar to Microsoft's Kinect for Xbox 360.
The Kinect enables users to control and interact with the device without the need for a game controller.
The device leverages a user interface and reads user gestures with a webcam.
The spin-off firm, called Beijing eedoo Technology Ltd, was formed to rival well established brands including Microsoft's Xbox, Nintendo's Wii and Sony's PlayStation.
Lenovo Group, Legend Holdings and Legend Capital co-invested in the newly launched company. Officials refused to disclose investment figures.
"We are the world's second company to produce a controller-free game console, behind only Microsoft," said Jack Luo, a former department chief with Lenovo, and now president of Beijing eedoo Technology.
EBox uses a camera to track player movement, but unlike Nintendo's Wii or Sony's Move system, eBox can plot movements and translate them into onscreen action without the need for a controller.
Kinect is expected to go on sale in North America this November, with a base price of $149.99 per unit. EBox will also make its debut this November, but may not hit the market until the first quarter of 2011.
The price for the eBox has yet to be hammered out. Luo said the price is expected to be higher than Nintendo's Wii, but it "may be slightly lower than Microsoft's Xbox, which retails for $299.99".
Beijing eedoo Technology's target customers for the eBox are mainly occasional rather than hardcore players.
"Our product is designed for family entertainment. EBox may not have exquisite game graphics, or extensive violence, but it can inspire family members to get off the couch and get some exercise," Luo said.
The company estimates up to 120 million urban families in China are potential buyers of the eBox.
If Beijing eedoo charges 3,000 yuan ($441.17) for every unit, more than 19 million Chinese families can afford one, according to a market survey conducted by Boston Consulting Group.
The survey also found that if the price falls to 2,500 yuan per unit, over 29 million families may be able to afford one.
Design concepts of Beijing eedoo's eBox. Provided to China Daily
"I expect more than 1 million eBox's may be sold annually after the first two to three years," Luo said.
He also revealed a dozen investment organizations have contacted Beijing eedoo, and new funding, estimated at around $10 million, will be injected into the venture by the end of this year.
"The long-term goal is to get the company listed," Luo said.
At present, 16 global video game developers have signed contracts to provide content to Beijing eedoo.
Around 30 free games will be included with each eBox purchase.
Microsoft's new Xbox 360 Slim gaming console. Provided to China Daily
According to DFC Intelligence, global revenue of video game hardware and software reached $60.4 billion in 2009. The figure may rise to $70.1 billion by 2015.
In China, the total market volume is unknown, because the Chinese government has banned importing game consoles since 2000 and gray market transactions are illegal.
The reason for the restrictions is because the government considers game consoles a potential danger to the physical and mental development of youth.
Zhang Yaqin, Microsoft's corporate vice-president who leads research work in China, said in July that Microsoft hopes to get approval from Chinese regulators to begin selling the Xbox in China.
"We hope to launch the Xbox as soon as possible, but it all depends on the government," Zhang said at the 2010 China Digital Entertainment Expo and Conference (Chinajoy), an online gaming fair in Shanghai.
The Xbox is manufactured in China and more than 40 million Xbox units have been sold overseas, according to Zhang. However, domestically, Xbox suffers from both market inaccessibility and piracy problems.
Beijing eedoo's Luo said his company was not afraid of challenges from international competitors, even if they do penetrate the Chinese market.
"We understand Chinese culture and customers better than our competitors. We still hold advantages in terms of Chinese game content, sales channels and customer service," Luo said.
Ouyang Xiangyu, managing director of Legend Capital and an investor in Beijing eedoo, said market competition is good for eedoo.
"One of the biggest challenges is to develop more games with a Chinese cultural element. That would help eedoo to win customers' hearts," he said.