Sony follows Microsoft into Chinese game consoles market

Sony has established two joint ventures in China for the purpose with a local firm

Sony is preparing to sell its PlayStation in China, joining Microsoft to compete in the country's fledgling gaming console market.

The Japanese company is setting up two joint ventures with local Chinese company Shanghai Oriental Pearl Culture Development, it said Monday. Both joint ventures, one focused on hardware and the other on software, will be established in a new free trade zone in Shanghai. China is allowing gaming console makers located in the zone to sell their systems to the rest of the country.

Sony will have a 49 percent stake in one of the joint ventures, and a 70 percent stake in the other, according to a Sunday stock exchange filing from Shanghai Oriental Pearl's parent company. The remaining stakes will be held by the Chinese company.

Sony declined to provide further details on its plans for the PlayStation in the country.

It is entering the market, after China recently ended its ban on foreign-made gaming consoles with the establishment of the new Shanghai free trade zone. The nation has a potentially large customer base, with 338 million online gamers, according to the China Internet Network Information Center.

Microsoft has already announced its plans for China, and is slated to bring the Xbox One to the market in September, through its own joint venture. Chinese companies, such as Huawei Technologies, ZTE and TCL are also jumping on the gaming bandwagon, and releasing inexpensive Android-based consoles.

But selling the products won't be in easy. In the case of Microsoft and Sony, both companies' systems are priced at the high-end, with the PlayStation 4 starting at US$399. In addition, individual games usually cost around $50, putting the systems out of the price range many Chinese consumers are willing to pay.

The other difficulty is regulation. Although China is opening up the console market, games must first receive approval from authorities. This could mean that more violent titles will be banned.

Sony's joint ventures in China, however, will introduce appropriate gaming titles and even create original products for the PlayStation, according to the stock exchange filing.

"We are considering any possibilities to cooperate with the local game development community," Sony added in an email.

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Michael Kan

IDG News Service
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