Xbox One may see buying rush in China

Updated: 2014-05-02 11:36

By Jack Freifelder in New York (China Daily USA)

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Microsoft Corp's selling of its Xbox One flagship gaming console in China later this year may see a rush of buyers, according to an analyst.

"I expect there will be a lot of interest," said Ed Maguire, managing director of the Software Research team at brokerage and investment group CLSA Americas LLC.

"What I would say about Xbox now is that they're addressing a market that has evolved around a lack of consoles. It's going to be difficult, but there's a unique experience that they bring to the table," Maguire said Thursday in an interview with China Daily.

Due to government officials' concern over unsavory content, a moratorium was placed on video game consoles back in 2000, and Microsoft, Nintendo Co and Sony Computer Entertainment Inc - three of the world's largest video game console makers - have since been left on the outside looking in at China's lucrative video game industry. China lifted the ban in January,

Maguire said that Microsoft has been "shut out of the Chinese market has been a challenge for [the company's] broader business aspirations in China."

"Over time, the challenge for Microsoft is going to center on delivery of the content and offering a viable alternative to some of the online and mobile games that are attracting a lot of attention from users," he said.

Microsoft announced its console rollout for China at a joint press conference with the BesTV New Media Co in Shanghai on Tuesday.

Maguire said partnering with foreign companies is an "absolute necessity" for Microsoft. He also said that picking up market share in a country where gaming consoles have been virtually nonexistent is not going to be easy.

"Gaming is based in a lot of habit and behavior, so there's always a learning curve when you learn a new system," Maguire said. "It's going to take time, but that said Microsoft is a company that has lots of patience. They will not be discouraged if the uptick in the first year or two falls short of expectations, but they'll be willing to stick with it."

"Microsoft wants to advance their platform strategy, so this is part of a longer-term strategy to proliferate the platform and be able to support it with the services," he said. "The key for Microsoft to become differentiated is to encourage a local industry of developers who are creating games on the Xbox platform."

Microsoft has not yet released price points or sales estimates for the Xbox One in China.

Microsoft, a worldwide leader in computer services, also manufactures and sells a wide variety of consumer electronics and personal computers. BesTV, a subsidiary of the Shanghai Media Group, operates its main business in Internet-based television services.

Enwei Xie, general manager of Xbox China, said in China "the opportunities are endless" for Microsoft's Xbox One.

Yusuf Mehdi, Microsoft's corporate vice-president of marketing and strategy for the Devices and Studios Group - which is responsible for most of the company's hardware products, including the Xbox - said BesTV "is the ideal partner" to bring the Xbox to China.

China's decision in January to lift its moratorium on video game consoles was accompanied with a requirement that gaming console units sold domestically need to be built in the Shanghai pilot free trade zone (FTZ) that was launched in September 2013.

A joint venture between Microsoft and BesTV became the first company registered in the FTZ.

The video game industry in China, the majority of which is concentrated on computer-based gaming, generated revenues of $13 billion dollars last year, a 38 percent jump year-over-year, according to the BBC News.

(China Daily USA 05/02/2014 page2)