The launch of the Xbox One in China is more than just a product release: it’s a step forward to revitalizing the country’s console gaming sector, and remains a landmark occasion for both Microsoft (NASDAQ: MSFT) and Chinese gamers.
Microsoft has received a substantial head-start over its competitors by being the first to release its platform to the Chinese market since the 14-year ban on consoles had been lifted.
The ban, which was originally instated in 2000, was established by the Chinese government in worries over the affects of violent video games on the public.
The Xbox One was first made available in Shanghai for a price point of 4,299 RMB ($699). In celebration of the console’s release consumers flocked to midnight launches held across the city, where they were able to try out games and get their hands on the system early.
The console itself was met with excitement and curiosity by Chinese consumers, who have been without consoles for almost two decades. The all-in-one entertainment system is an interesting entry point for the market, as it will serve a multitude of functions rather than being just a video game console.
The Xbox One allows users to make and receive Skype calls, “snap” apps across games and movies for multi-tasking, and has a host of video playback capabilities.
Microsoft’s next-gen console hasn’t been a huge success in all Asian markets, however; the system flopped in Japan, only moving a paltry 23,000-some units.
It’s important to remember that Japan, unlike China, has a rapidly-expanding gaming sector where hardware and software is readily available, and is the nexus for both Nintendo and Sony.
Only ten games were available on day one in China, all of which are titles like Kinect Sports Rivals, Forza 5, and Max: The Curse of Brotherhood.
Microsoft further reveals that it has been working with Chinese developers to craft exclusives like Neverwinter Online as well as titles from Gamebar and Yingpei Games. Other multi-region games like Sunset Overdrive will continue to bolster the current lackluster games lineup.
Even though the ban has been repealed, the government still won’t allow certain violent and controversial games such as Call of Duty Ghosts, which was noticeably absent upon launch.
Facing the Underground Market
But an early start may not be enough for Microsoft to win over the market. The Redmond-based console-maker will face many challenges on their journey in the emerging sector, and will go against a massive established black market for video games.
As a result of the console ban, a lucrative and widespread black market for video games sprouted up, and has been serving Chinese gamers for 14 years. This underground marketplace imported consoles and various hot titles like the Grand Theft Auto series, making it a thriving illegal enterprise.
Should the country relent on its strict laws on video games, console-makers like Microsoft will have to catch up and fill in that gap–which is beginning to form thanks to the Xbox One’s launch.
Microsoft will also go against mobile games, which are hugely popular and profitable in the country.
Amid these potential roadblocks, Microsoft’s Xbox One release has made history and serves as a beacon of change for China’s video games market. Tapping into this renewed market will no-doubt give Microsoft a nice boost to compete with the current next-gen juggernaut, Sony’s PlayStation 4.
While the stringent regulations and laws on video games may still be in place, the introduction of these platforms remains a key branching point for a profitable industry.