Microsoft and Sony’s home console rivalry is going to the largest consumer market in the world.
Today, Sony said its PlayStation 4 and PlayStation Vita portable gaming system go on sale in China on Jan. 11. The move heralds the opening of the potentially huge Chinese console market after the government finally lifted a 15-year-old ban on game machines. It also means that Sony will miss the critical holiday sales period and debut four months after Microsoft’s Xbox One started selling in China.
The PS4 costs 2,899 renminbi (RMB), or $468, while the Vita is 1,299 RMB, or $209.
“PS4 is expanding at the fastest rate in PlayStation hardware history, and the global gaming community is enjoying the ultimate entertainment experience only available on PlayStation,” said Andrew House, the president and group CEO of Sony Computer Entertainment, the game division of Sony, in a statement. “We are delighted that we are able to fully launch our business in China, which is a market with great potential. We look forward to delivering exciting software, convenient services and entertainment experiences only possible on PlayStation to the many gamers in China.”
Sony said that 70 third-party game makers are planning to deliver games in China. Ubisoft announced today that it‘s bringing Rayman Legends and Trials Fusion. Sony will have its own internally produced games. And Chinese-made entries include King of Wushu (Suzhou Snail Digital Technology CO., Ltd), Mr. Pumpkin Adventure (Shanghai Youju Information Technology Co., Ltd), and One Tap Hero (Shanghai Kena Information Technology Co., Ltd).
Sony counts Modian.com and Shanghai Oriental Pearl SUOLE Culture Development as partners in this move.
Lisa Cosmas, managing partner at Niko Partners, a market research firm that specializes in analyzing the Chinese game market, had this to say:
Sony announced PS4 will launch January 11th. The Xbox One launch was delayed for one week from its date as you might recall back in September, but the delay was because yet another Chinese regulatory agency needed to take some ownership of the approval process before the launch could happen. There are multiple regulatory agencies and ministries now governing game consoles (and all aspects of games) in China.
We should look at the console market in China as two segments: high-end (Xbox One, PS4, and maybe Alibaba), and console alternatives (Android-based, lower cost boxes for TV-based gaming such as 360 Box, MI Box, Funbox, and other domestically made console alternatives). Both are building up the living room as a nexus for digital entertainment, and the market has room for both segments. The big bet is whether Chinese gamers will actually embrace the high-end console segment, since they have had access to them for years even during the ban, and because they are now so ensconced in playing high-end PC online games.
Chinese console gamers knew that Xbox One would not be the only option, so those waiting for the PS4 were fine with the waiting period knowing it would be only a short time until they had their option available to them. The real question that will lead to the answer of which of those two consoles (if either) wins the high-end console race is: who will get the best content? Without the games that draw console gamers to those high-priced consumer purchases, there will be no reason to buy either one.
Keep in mind that PS4 is distributed by the JV with Oriental Pearl Culture Development and Xbox One is distributed by the JV with BesTV – and both OPCD and BesTV are owned by Shanghai Media Group and an announcement was made that the two companies will also merge together. Therefore PS4 and Xbox One are sister products in China, and their ultimate parent SMG just happens to be at least 50% owned by the government. And with the latest rumor about Alibaba coming out with a competing product we will soon see a Chinese company competing against two foreign competitors that are sitting side by side with big investment into the parent company by the government. It gets a little interesting when you look at it that way.
And I will repeat: none of it matters unless great console games get approved for license in China, or developed in China for domestic launch. Content is king.
Patrick Walker, head of insights and analytics at market researcher EEDAR, said:
Launching the PlayStation 4 in the Chinese market is a great move for Sony not only because there is new immediate opportunity for traditional consoles in China, but also because of the long term benefit of establishing the Sony gaming brand in such a large market. The growth in the Chinese economy is creating a new population of gamers that can afford gaming hardware at higher price-points. There are huge benefits to being a major brand when consumers are first engaging in a new type of experience. An example of this is Nintendo entering the North American console market early and establishing a brands that continues to be relevant almost 30 years later.