Video game gold mine

Some 540 mil­lion es­ti­mated to play as rev­enues surge in China

China Daily (USA) - - FRONT PAGE - By CHI­NADAILY Meng Jing and Wy­att Bush con­trib­uted to this story.

Com­pared to other gam­ing sec­tors, con­sole gam­ing in China is still in its in­fancy but an­a­lysts said it is poised for big growth.

Neo Zheng, a re­search man­ager at mar­ket re­search firm In­ter­na­tional Data Cor­po­ra­tion, said that fewer than 600,000 gam­ing con­soles, such as Sony’s Plays­ta­tion 4 or the Nin­tendo 3DS, were sold in China last year.

That’s less than two per­cent of the to­tal world­wide con­sole sales. In con­trast, more than 15.5 mil­lion were sold in the United States.

“There is large po­ten­tial for that sort of de­vice grow­ing in the next cou­ple of years,” Zheng said.

An­drew Horn, project man­ager at Daxue Con­sult­ing, said he ex­pected the pen­e­tra­tion rate for con­soles in China woul­dreach20per­cent in2017, whereas the 2014 gam­ing mar­ket pen­e­tra­tion rate for Amer­i­can con­soles was 51 per­cent.

Still, a 20 per­cent pen­e­tra­tion into China’s 2017 gam­ing mar­ket should come out to about 20 mil­lion units sold— a mas­sive in­crease from the cur­rent num­ber of sales.

Ac­cord­ing to Horn, the gap is the re­sult of a ban on con­sole gam­ing im­posed by the Chi­nese gov­ern­ment in 2000 in or­der to com­bat a prob­lem of a youth gam­ing ad­dic­tion. How­ever, the Chi­nese gov­ern­ment has since con­di­tion­ally re­versed its stance af­ter the ban lasted longer than a decade.

Since 2014, for­eign com­pa­nies have been al­lowed to sell and man­u­fac­ture con­soles and games in China as long as they were able to pass the gov­ern­ment con­tent re­view process. Ad­di­tion­ally, for­eign com­pa­nies must part­ner with a Chi­nese com­pany that op­er­ates in a for­eign-trade zone to bring its prod­uct to mar­ket.

As such, in 2013 Chi­nese tech com­pany Baishi­tong part­nered with Mi­crosoft in or­der to form a joint ven­ture to launch the Xbox One, the first Xbox con­sole to be re­leased in China. Sony fol­lowed suit shortly there­after and worked with the Chi­nese group Dong­fang­mingzhu in or­der to in­tro­duce the PS4 to Chi­nese mar­kets.

Rather than be­ing too ob­sessed about the num­ber of con­soles sold in China, Xbox boss Phil Spencer said in an ear­lier in­ter­view that the best way to boost sales was to fo­cus on de­liv­er­ing great games to Chi­nese gamers.

“As our game port­fo­lio strength­ens, so will the sales of Xbox con­soles in China,” he said.

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