Half a year after China lifted its console ban, allowing gaming consoles to be legally sold within the country for the first time in over a decade, China's console gamers are yet to get their hands on anything. But the launch of China's first official console is drawing ever closer. At the recent ChinaJoy game conference, Microsoft announced the device's official price (RMB 3699, or about $600) and its official release date (September 23). The Xbox One is coming, and it's coming soon.
But will China's consumers actually care? That's the question observers (myself included) have been asking since whispers of the console ban being lifted first came up. After all, the country's console restrictions have not been strictly enforced, and gray-market imported consoles (many of which have been hacked to play cheap pirated games) have been easily available in China's electronics markets all along. But despite the proliferation of these less-than-legal consoles, China's gaming market is still dominated by the PC and mobile platforms.
Now that we have some details about the Chinese Xbox One—a price, a release date, game pricing and lineup, etc.—it's possible to assess Microsoft's chances of making a bigger dent in the market than gray-market consoles have.
One thing Microsoft has done right is hype. Whether it's an intentional marketing play or not, the persistent rumors and speculation about the device's price over the past several months have gotten Chinese gamers to pay attention. Sure, a lot of that attention initially took the form of scorn and derision when rumors arose the device might cost more than $800 in China. But "overpriced" rumors have actually helped soften the blow of the device's actual pricing: it costs a cool $100 more than the same product in the United States, but Chinese gamers responded to the news of the official price with a surprising degree of positivity, probably in part because it was lower than the rumored price.
And although the price of the console itself isn't great, Microsoft does deserve some credit for game prices. The company has said games in China will cost between $15 and $40 depending on the specific title, and while that’s not cheap by the standards of Chinese gamers, it does make them far more affordable than games in the West, which generally cost $60 at launch.
Another thing Microsoft has done right? The games. I have long been skeptical of consoles' ability to get a foothold in China's gaming market because China's favorite game genres (MMOs and MOBAs) don't generally appear on consoles, in part because they don’t always work well with controllers. But the Chinese version of the Xbox One will come bundled with the free-to-play MMORPG Neverwinter, and it looks like other Chinese developers will also be offering Xbox One games designed to cater to China’s specific gaming tastes, rather than just pushing localized versions of Western games (although the Xbox One will have those, too).
But Microsoft's biggest success may ultimately prove to have been that it was first to hit the market. Sony and Nintendo are also eyeing the Chinese market, but the Xbox One will be the first to hit the country officially, and it is benefiting from the additional publicity that comes along with being the first official Chinese game console in over a decade. More than that, though, getting to the market first has proved to be valuable in the Microsoft/Sony console rivalry. Sony beat Microsoft to market with the Playstation 2, and that console ended up significantly outselling the original Xbox. Microsoft turned the tables in the next generation, and its Xbox 360 outsold the Playstation 3. It's far too early to call a winner in the Xbox One vs. PS4 wars, and of course, console sales are affected by a variety of factors. Even so, though, it seems clear that being first to the market doesn't hurt, and Microsoft will have that head start in China.
Microsoft's biggest mistake, I suspect, is the fact that it is choosing to charge money for its online service (Xbox Live Gold) in China. Granted, the service is also paid elsewhere, and the Chinese console comes bundled with around six free months of Live Gold, but when Chinese gamers start having to pony up monthly fees for the service in March of 2015, I suspect they're going to be put off by the cost, given that most of these games and services are available for free on the PC.
Another major problem the Xbox One will face in China is that it’s completely region-locked. That's not a big surprise given the different game pricing and the fact that games released in China will have to meet with the Ministry of Culture's approval prior to release. But since some of the console's globally-popular games (like the upcoming next-gen release of Grand Theft Auto V) aren't likely to ever get through China's censorship board, that means that Chinese Xbox gamers won't have access to them. And that may drive some gamers back to gray-market imported consoles, which typically aren't region locked.
So can the Xbox One be successful in China? Don't expect it to enjoy the same level of success as it has in the West, but it's possible the device could carve out a niche for itself as a kind of status symbol buy for China's upper-class gamers. Lots of Chinese tech companies are fighting to ensure they've got a place in middle class living rooms and on TV screens as China's middle class grows, and Microsoft will be hoping that that market picks up console gaming the same way the West has. I don't think the Xbox One is likely to pose a threat to the PC anytime soon, but it may nevertheless be able to find a foothold in China.
