Con­sole games set to lift off in Chi­nese mar­ket

China Daily (Canada) - - BUSINESS - By SHI JING in Shang­hai shi­jing@chi­

Nowthat the 14-year ban on game con­soles has been lifted, the flood­gates are open for a num­ber of the world’s lead­ing game con­sole providers to pour into the Chi­nese mar­ket.

Ap­proval for the pro­duc­tion and sales of game con­soles has been one of t h e high­est-pro­file de­vel­op­ments in the China (Shang­hai) Pilot Free Trade Zone, which was launched in Septem­ber last year. The two gi­ants in the game con­sole world, Sony Corp andMi­crosoft Corp, successively an­nounced the re­lease of their most cel­e­brated de­vices this summer.

To­gether with A-share listed Ori­en­tal Pearl Group based in Shang­hai, Sony an­nounced in late May that they will set up two joint ven­tures in the FTZ for the pro­duc­tion, sale, re­search and devel­op­ment of the hard­ware and soft­ware for Sony’s best-seller PlayS­ta­tion con­soles.

Just over a month later, Soeda Take­hito, head of the China strat­egy de­part­ment at Sony Com­puter Entertainment, said that some parts of the PlayS­ta­tion con­sole hard­ware will be man­u­fac­tured in the fa­cil­ity lo­cated in the FTZ. The con­soles will mainly pro­vide Chi­nese ver­sions of the orig­i­nal games, while lo­cal­game­sawait devel­op­ment and pro­mo­tion.

On Wed­nes­day, Mi­crosoft an­nounced the launch of its Xbox One con­sole on Sept 23. The launch comes less than 10 months af­ter Mi­crosoft set up a joint ven­ture with the Shang­hai-based elec­tronic man­u­fac­turer BesTV Net­work Tech­nol­ogy Devel­op­ment Co Ltd in the FTZ.

The con­sole with­out the Kinect mo­tion de­tec­tion sys­tem is priced at 3,699 yuan ($599) and 4,299 yuan with Kinect in­cluded.

The price, ac­cord­ing to Li Wen, vice-pres­i­dent of BesTV, is much lower than ex­pected by a large num­ber of play­ers.

“In the North Amer­i­can mar­ket, video games, or con­sole games, take up about 57 per­cent of the en­tire gam­ing mar­ket, the largest part among all sec­tors, while the fig­ure is 51 per­cent in Europe. How­ever, the fig­ure is zero at present in China, which gives us the con­fi­dence to be­lieve that the mar­ket will soon lift off here. The out­put value of con­sole games will soon reach 200 bil­lion yuan in the next few years,” said Li.

Sta­tis­tics pro­vided by the in­ter­na­tional mar­ket re­search and con­sult­ing firm Newzoo BV show more than 1.2 bil­lion con­sole game play­ers in the world. The in­come from con­sole games ac­counts for 43 per­cent of the to­tal $70.4 bil­lion in­come of the global gam­ing in­dus­try.

The Chi­nese mar­ket also re­sponded quickly.

Ac­cord­ing to Xie En­wei, gen­eral man­ager of Mi­crosoft’s greater China re­gion, more than 9,000 Chi­nese gamede­vel­op­ers have con­tacted the com­pany in the past four months with the aim of launch­ing their games on the Xbox con­sole.

Mi­crosoft has looked far be­yond that. Apart from set­ting up two stu­dios — in China in the hope of bring­ing the best

has games from over­seas and pro­vid­ing lo­cal games— entertainment, fit­ness and on­line ed­u­ca­tion pro­grams are be­ing re­searched for fu­ture pro­vi­sion on the Xbox con­soles sold in China.

Mi­crosoft’s plan in China is def­i­nitely a bet­ter prac­tice, ac­cord­ing to Shirley Lin, vi­cepres­i­dent of the mo­bile mar­ket­ing com­pany YeahMobi, which is a sub­sidiary of theUS NDP Me­dia Corp. The mar­ket is huge — the out­put of the Chi­nese gam­ing in­dus­try amounted to 13 bil­lion yuan last year, ex­clud­ing con­sole games, and China sur­passed the United States to be­come the No 1 buyer of new TV sets in 2013. But a global mar­ket leader such as Mi­crosoft should tread care­fully with re­gard to a num­ber of is­sues in­clud­ing game con­tent, which was a ma­jor rea­son for the ban 14 years ago.

“It is cru­cial for over­seas com­pa­nies com­ing into China to lo­cate the right con­tent part­ners that have been granted IP li­censes and have loyal au­di­ences,” Lin said. Only in this way can the con­sole providers find the right chan­nels of dis­tri­bu­tion their games.

“The pie is big, but chew­ing is chal­leng­ing,” said Lin. “China is a large ad­dress­able mar­ket. The hunger for su­perb qual­ity games is only in­creas­ing, never re­duc­ing. We are now glad to see that the black mar­ket has come into the light.”

With the avail­abil­ity of these over­seas game con­soles, the Chi­nese mar­ket play­ers will soon come up with their ver­sions of con­soles so that the de­vices will be­come more af­ford­able, she added.



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