MS Sending Xbox One to China Will “Cost them dearly” says American McGee

"Microsoft recently announced that the Xbox One would see an official release in China this fall. American McGee, a game designer who lives in Shanghai, has shared some insight as to why this is a move that will cost Microsoft quite a bit of money." -PSLS

[knifefight]

See also: Japan.

[mkis007]

I noticed a l ot of people seem to think the website means it is a biased article...It is from facebook. American McGee has a facebook and posted this yesterday.

https://www.facebook.com/am...

[Jazz4108]

Ms has the money to go into China a see what happens where Sony can't afford the risk. That's the only reason I can see a playstation article trying to come up with reason's for ms to fail in China and money is not one of them.

[knifefight]

Re: "a playstation article trying to come up with reason's"

Proof that you didn't even read it.

[StifflerK]

To a degree yes, BUT , there are many people in China who have been obtaining video game consoles/games illegally (due to the ban) so there clearly is a market.

It might be a niche market - but these people can now buy consoles and games upfront legitimately - that alone might open up the market to those put off by the rules that were in place before.

[OrangePowerz]

Most games will still be illegal because of the content they contain they will still be banned.

[HugoDrax]

Niche market or not, there are 500 million gamers in China alone. If Microsoft has success, then it will be huge.

[Magicite]

there are less than 1,5billion people in china. wana say almost every third is a gamer?

[Flutterby]

Most are pc gold farm companies not console gamers lol

[rainslacker]

It'll really cost any company. But companies have to take risks and invest in things that may not be immediately profitable. While consoles may be in a fledgling state in China, MS is better off losing money now to gain mind-share for long term success. Sometimes looking at the short term benefits costs a lot more in the long run. If say 10 years from now the market shifts and China becomes huge for consoles, MS doesn't want Nintendo or Sony to have a lock on that market.

MS went a couple decades without being really forward thinking in their product line. Now they're playing catch up in markets which are replacing the bulk of their past success...namely the PC market.

[iamnsuperman]

I think it depends how they loose money. If it is a large investment for a small to no gain but with no piracy then okay it probably wasn't worth it in hindsight but at the time the investment makes sense because it could be potentially good. If the large investment still means high piracy then the investment is incredibly bad. China (even with a ban) had huge amounts of piracy with video games and video game consoles. China is the last market to hedge bets on (profitably)

[rainslacker]

No doubt. Piracy is rampant over there. I'm sure the Big 3 are well aware of it. However it comes down to the fact that piracy will exist regardless of it's official release. If they can get market-share regardless of piracy, then it's good for them.

I really don't know how well official consoles will fare over in China. It's an interesting time in an untested market, and the piracy issue seems to be something that China doesn't really care about.

I feel for long term success MS, Sony, and Nintendo, would have to tough it out. The chances that the piracy issues have more pressure applied to them is pretty great. I doubt any of them would fare better without larger investment if they wait until the market is prime for console release.

[stuna1]

I just don't see the penetration of Xbox1 into the China market as being without its challenges! Which is why I think Microsoft even said that they're only supplying 100,000 units, and that more so to test the waters. The fact that it has been 14 years since legal distribution of consoles in China, I don't see many being aware things have changed! Plus those who have already managed to aquire consoles don't have the issue of jumping through hoops that the legal released consoles will bring. They also were able to aquire these consoles at a significantly cheaper price.

This also doesn't shed any light on the level of support the console will ultimately receive, as well as in what time frame! After all it is a U.S cetric product.

[Charybdis]

I think playstationlifestyle and american mcgee are exaggerating. Not saying that entering a new market isn't hard for any company, but apparently there is sufficient demand for consoles for there to be a black market for said consoles.

Microsoft is officially entering the market with a relative small number of x1 consoles and relative high pricing (compared to pricing in other countries),not sure if higher priced but assume it would be cheaper than a import or 'illegal' console. This (small number/ high pricing) makes sense; as I assume the consumer market which has access to a high speed internet connection,a hd television or has enough disposable income (for a xb1/ps4) isn't as big as in 'western countries'.

Getting a foothold in China as a whole will cost Microsoft as they will need to adhere to Chinese policies and regulations. While this is true I think will have at least prepared a business plan for this in which they will profit from it. What I find more interesting is the opportunity this might allow for Chinese developers creating content which may or may not be exclusive to china.

[ghostface9]

Phil spencer is already talking to china game makers to get there products on x1 also it doesnt cost them money to partner up with bestv its a joint venture so every console and game they sell is profit

[AnteCash]

And how soon after will x1 ripoffs going to emerge in china...

[TheEnigma313]

I'm sure it's started already. They bootleg everything there.

[stuna1]

That's exactly what's going to happen! A large amount of products sold in China are actually reversed engineered from other products and sold at a lower price. There actually are knockoff Xbox's, Ps2 ,PSP's, Ipod's, Ipads, Iphone's etc.

China is actually pretty self sufficient on it own, needing minimum outside intervention or help industy wise.

[ghostface9]

ya the reason there knocked off though is because you cant legally get those products there. now that its legal to buy them bootlegging should be minimal. I would do the same if my country wouldnt let in the x1.

[Charybdis]

The original xb and the xb360 have been cracked so that could also happen with the xb1. With the previous xb consoles being easy to hack Microsoft might already have some brand recognition with the xb1.

Bootlegging the xb1 however is harder to justify as the console and games receive so many updates and not to even speak of some of the online server functionality/ requirements of some games. Hope for Chinese gamers that Microsoft has some azure servers in their region.

[mrpsychoticstalker]

The Xbox will be a success in China.

[AnteCash]

Sed no one ever..

[Predaking77]

We can do that too...

The PS4 will be a success in China ;)

[Jazz4108]

The article should state how Sony could afford China not ms as sony has a lot more baggage and money issues and I don't even see them trying.

[Predaking77]

@jazz4188

Sony already confirmed they are working on to launch on China, they just have not announced an specific date.

[Kribwalker]

It's a territory MS can win as the Chinese strongly dispise the Japanese so I see it as tougher for the PS4 to succeed there

[KonsoruMasuta]

If the Chinese strongly despise the Japanese, what makes you think they will like Japan's ally even better?

Little do people know, the US and Japan have a military alliance and the US has vowed to help Japan in it's conflicts with China.

[Nekroo91]

Indeed Obama was in Japan last week and he gave U.S support to them against the Chinese.

They werent happy.

But that doesent matter , all games are banned in China, you cant play Gears or Halo, or Cod or BF and also dead rising etc due to restrictions

[GameDev1]

That is an ignorant statement

First of all its spelt despise

Second of all, China and Japan dislike of each other is from a political point of view, when it comes to the Economics of making money, both their Government's help out each other, guess where the PS4 is manufactured?. Sony partakes in good business with China

Another example is the injustice between Ireland and England, the British bombed Ireland, discriminated against them and treated them with lack of respect
But the major companies in the UK are a success in Ireland, Irish are highly employed in those companies.

You should do some research before you write

[KonsoruMasuta]

He is right, to a degree. There have been many instances where Chinese consumers have boycotted Japanese products. I remember one boycott that was organized a couple of years ago.

Of course the situation isn't as bad as these people claim it is though. Plenty of Japanese products do alright in China.

[XxExacutionerxX]

Its a video game console, lets not get political here, lol X1 and Ps4 will both do very well in China.

[Swiggins]

You're a fool if you believe that the ire that the Japanese and Chinese have for each other doesn't affect business relationships on some level.

[GameDev1]

@Swiggins

Ah yes, abusing people, shows sign of no knowledge and not being very intelligent.

Of course it can affect on a business levels but that is due to a group of individuals political view not the whole of China

As i said, economic wise, Japan and china have a good relationship, Japanese products sell well there

Do you think Sony will manufacture their console there or even if consider selling there if they know the political aspects will affect the sale of their product?

[Swiggins]

What IS the political view of a country if not the view of it's population? Companies make deals for the bottom dollar that's true; but you're ignoring the political underbelly that goes hand in hand with business relationships.

The atrocities that Japan committed in China before and during WW2 are VERY MUCH still in the collective memories of the Chinese people. Japanese products might be made in China but that's because EVERYTHING is made in China. China has all but a monopoly on global manufacturing. The reality of the matter is that Japan CAN'T make their products anywhere but China, the sheer labor force tailored to electronics doesn't exist in other big production countries like India or Nicaragua.

I've got this bit of news for you as well, Japanese products don't sell in China, mostly out of the Chinese people's resentment.

I was wrong to call you a fool, you're right, but that way of thinking IS foolish.

[GameDev1]

@Swiggins

I NEVER ignored the political views which is why i pointed out individual groups will have their own political views against Japan but certainly not the Chinese Government and the whole of China.

Not everyone in the population of a country agrees with the countries political view, every individual will have their differences. And I certainly believe if China really had a problem with Japanese business or products due to their political views, Japan would have to find another place to manufacture their products.

People can never forget such atrocites but they move on, which is why i also pointed the Irish/British relationship, you think everybody in Ireland has forgotten what the British have done? No, but as for the Irish growing economy, they accept Britsih companies and British Companies come to Ireland to employ a huge amount of Irish people because commercial wise it is great for both countries. It is the exact same with the Japan/China relationship, no one forgets but they move on for the best of their country. And Japanese products do very well in China.

It is NOT a foolish way of thinking, because you seem to be stuck on this past political atrocities in China, which lets remember USA was also part of but western products are adored there. But most of all China love their own products and pirate any product to their standards

[T2]

waiting for this comment, where you have done zero market research but this comment literally comes up every time..

just google japanese products sold in china not that hard... cars, electronics, etc all sell in china.

as do american made cars, etc...

[TitanUp]

i dont really see any of the current systems doing well in china with all the restrictions.

360,ps3 and wii would probably be the best systems to release in that market.

variety of games that wont be banned.

[incendy35]

The hardest part about games and even apps in China is their laws for content ratings are so restrictive. Iran is really restrictive too. Every time I submit an app to the Store I get rejected in both of those areas. Last app I submitted was rejected because there was content where a girl had skin showing "and it wasn't even suggestive or meant to be". Hard to see most video games making it through their Wall, unless they have decided to relax that policy as well.

Huge market and potential though, definitely worth trying!

[ALLWRONG]

Lot of damage control around MS's launch in China lately.

[Fishy Fingers]

Fitting article for Playstation Lifestyle.

[headblackman]

smells like fear, but the fear isn't coming from microsoft.

[AKissFromDaddy]

1. Can't sell sand at the beach. Xbox One, PS4 (and all previous generations of consoles) are ALREADY IN CHINA. There is NO effective ban. Go to Taobao (www.taobao.com) and punch in "Xbox One" or "PS4." You will find (as will Chinese consumers) consoles and games available for next-day shipping to your doorstep in China.

My gosh, every point is damning.

3. Piracy. If you've not seen it in China, you've not seen anything. It's massive, awe-inspiring, and will poke giant holes in even the best digital content plans.

I think an all digital console would be necessary but will it stand in China, I doubt it because of #1.

5. Censorship and restrictions on content. Any console shipped out of the Shanghai FTZ will be unable to play any games other than those approved by the Ministry of Culture (and other media oversight bureaus). That means content for the device will be limited and inferior to what could be had by purchasing a black-market console on Taobao. Chinese consumers are wise to hardware/software restrictions and prefer to purchase "rooted" devices whenever such restrictions are put in place. Back to point #1 and #3.

This one hurts the most. Can't officially sell or play Halo, Ryse, Dead Rising 3, or TitanFall. Not even Call of Duty.

He finished with, "Hey Sony, you know better than to follow Microsoft into this punji pit, right? Right? Sony?" I'm dead.

Source: https://www.facebook.com/am...

In 2005, McGee left the United States and resided first in Hong Kong and now in the Chinese city of Shanghai.

So he lives in China and is using his own experience. He's convinced me the black market is the only alternative.

[T2]

ya a lot of good points here... In china they would probably use engineers to pirate a console, it is a whole industry there.

[AKissFromDaddy]

Agreed. An money-sucking industry within an industry built from China's restrictive regulations for Microsoft.

That's appealing....not really.

[Funantic1]

This guy doesn't know what the hell he's talking about. Just because some people illegally bought X1s and PS4s in China doesn't mean much. There's always gonna be people who fear the consequences of breaking the law. That's like saying cable television couldn't sell well over there because people are already stealing it. Then he says people don't have time to play video games over there. I guess the ones that already bought one illegally are the only ones with free time. Then on top of that this is an article on Playstation lifestyle.

[styferion]

you never live in piracy-heavy countries do you?
try living in one, you're in for a surprise :)

and yes, I used to live there so I know.

[wheresmymonkey]

Having actually been to china i agree with Mcgee entirely. the chinese will just continue to buy import boxes and whatever is hacked. Like they have been doing for forever.

Here's two xbones. One will play gears 4, Halo 5 and GTA VI. The other wont because of locks placed on the console to stop banned content from working. Which console do you buy?

[OC_MurphysLaw]

a PlayStation site running a story about Xbox failing. nudge me when a relevant business site discuss is this or a developer with a little bit more cred these days then American McGee who hasn't made a hit in a long time.

[HugoDrax]

"a PlayStation site running a story about Xbox failing."

I thought you were referring to N4G hahaha! This article probably was approved in 5 seconds lol.

Anyhow, why are so many PLAYSTATION only gamers concerned with what Microsoft has planned in China? Seems like they're really nervous about Microsofts plan.

I know one thing, this so called console war just become more interesting! I for one play Japanese imports all the time ( Hatsune Miku Project Diva, Sangoku Musou ). So hopefully I get to try out some Chinese developed IP's that won't require much reading for navigating the menus.

[mkis007]

https://www.facebook.com/am...

This is where the original was from...Sit Down!

[OC_MurphysLaw]

I've been seated the whole time. American McGee lost his relevancy long ago.

[mkis007]

Then Stand UP!lol

hey now, I backed his Alice project, and it was successful. It may be niche, but I like his style, Kinda like Tim Burton.

[tawak]

they will hack xbox one and xbox live to death. the china goverment might even encourage and help the hackers wagon

[Codewow]

People all over the world hack the system every day... nothing new there.

[Gamer666]

That's pretty lame. This is not about selling to every Chinese person. This about selling to the Chinese market however big or small it is.

Chinese have a healthy appetite for electronics so I don't think it will be too much of an issue. I'm sure that they will not sell milllions in the first year but a few hundred thousand would be a great start.

[Knightshade]

Let's do some math....680 million+ Internet subscribed people in China. Roughly 275 million Internet subscribed folks in the USA. Yea, I'm sure it'll "cost them dearly". On a COMPLETELY unrelated note, when was the last time American McGee did anything worth buying?

[ghostface9]

ahaahaha of course this comes from a playstation website lmao. Always looking for crackpot theories to make it sound like the x1 is gonna fail. Yes there are illegal ways to already get the console but if its more wide out in the open it opens it up to the entire country instead of just those that know the work around to get on imported which most likely costs alot more to do and would make people shy away from it. Just think of this If they sell the console to 1% of the population thats 10 million consoles which is a huge number from one country. Also Phil Spencer is in china right now talking to game developers about what they want to be able to bring to the console and seeing is how they are the only console going to be in that country for a little while at least they will get rights on exclusive games for the x1 to sell in other countries

[mkis007]

https://www.facebook.com/am...

It came from here the websites just picked it up.

[Codewow]

China has a freaking League of Legends COLLEGE I think they will find time for video games somewhere.... They're also getting a stadium dedicated to purely video games tournaments....

[Linkz973]

I could just picture Call of Duty College, or Halo University for america lololololz

[feraldrgn]

I think sending it to China will be slightly more successful than they will be in Japan.

[Gunstar75]

As long as MS court local developers, then this could be a hit

[ma1asiah]

China has a huge DOTA and World of Warcraft fanbase. As already stated they are predominantly a PC gaming population. I doubt either console will find great success there.

However having said that if the right kind of games and local content was promoted on either console then it might prove a turning point.

You also have to take into account that a console ban has been in place for years in China....so maybe just maybe the fact that gamers in China can legally buy a console through legitimate means may open doors otherwise closed.

Come September only time will tell, but I would not be banking on a huge increase in sales due to launching in China.

[wannabe gamer]

american mcgee... who? oh that alice in wonderland game...yea ok