Beginning this September, Microsoft’s Xbox One console system will become available to Chinese gamers. Microsoft will be entering a consumer market with an enormous sales potential by extending video game trade with China. Last year, China created what is called the “Shanghai Free Trade Zone,” in which otherwise limited markets, such as gaming consoles, are less restricted than in other parts of the country. Microsoft partnered with another consumer electronics company, BesTV, to form E-Home Entertainment and ease its expansion into the Free Trade Zone.
E-Home Entertainment is determined to seamlessly introduce Chinese consumers to foreign gaming consoles. Microsoft also envisions E-Home as a platform for international creators to bring fitness and entertainment experiences to Chinese homes. The entertainment company is not only breaking ground in the international gaming world, but is one of the major players in a new trade movement with China. The nation is rapidly becoming what appears to be the largest player in international trade.
The Shanghai Free Trade Zone is intended to encourage foreign investment in a particular set of industries, including medical services and telecommunications. China wishes to encourage competition in key industries while opening a large market to foreign involvement, though some have questioned the efficiency of such a rigid, liberalized zone which has attracted mainly domestic companies’ attention. The zone is widely viewed as experimental and temporary, intended to gauge the effect of foreign trade in particular economic sectors.
China banned the sale of Western video game consoles in 2000 after an alleged, widespread parental outcry claiming that video game systems would harm the development of children. Shortly thereafter, however, online video gaming, including the widespread usage of Massively Multi-player Games like World of Warcraft (or WOW), became intensely popular in the nation. The market for console gaming remained unstable due to the frequency of piracy and imitation. Microsoft is moving into lucrative territory by introducing the Xbox One to Chinese gamers.
China recently released a statement outlining criteria that console games must meet before becoming available to consumers. In the statement, it is explained that games must be approved by a local, cultural department. The approval process, while relatively short, will include screening games for offensive content such as gambling, racial or ethnic hatred, promotion of cults, drugs, violence, or obscenity. The guidelines also suggest that any game which threatens China’s constitution or integrity as a nation could be banned. Xbox One games that are seen as unfit to be sold will be returned to the company with a comprehensive list that details the reasons for their rejection. It is unclear how these policies will affect the sales of popular, yet controversial game series such as Resident Evil, Grand Theft Auto, and many more.
Companies such as Apple have already been selling to Chinese consumers and have enjoyed the profits from a growing Chinese middle-class. As the nation continues to boom, figures suggest that somewhere between 100 million and 500 million gamers are estimated to purchase the system. Microsoft could potentially see massive profits, making up for the the Xbox One’s international lag behind other consoles such as the PlayStation 4.
By James Ryder