Late replies, but here I go.
Genre preference to PC is usually due to localization and piracy.
Console games are rarely localized outside of first party titles and the "easy" stuff (ex: Dynasty Warriors.) So even till now, console gaming are reserved for those who are willing to put up with Japanese/English.
Yes, Non-localized PC titles don't sell well in China either.
As for distribution - anyone who wants a console knows where to get one.
Like every other hot and popular tech device that isn't officially released in China.
It's not grey to the point where you have to walk into some secret basement shop or something.
Yea, I wouldn't be surprised in the games required for a console to take off over there are very different from over here. A lot of games in various genres have been seeing f2p experimentation (especially Namco), so this may not actually be a large problem in the future. The indie push can probably go a long way to getting enough local content onto the boxes to make them a worthwhile option.
It will still be a problem for Microsoft specifically if they don't alter Xbox Live though.
The grey market is already extremely widespread and cheaper.
Chinese gamers also heavily favor F2P PC games because they're free.
Other companies have attempted to sell consoles in China and they were largely unsuccessful.
Same response as above for this I guess. Price would be important and the games required to gain popularity will likely need to be different. I don't think past failures rule out any possibility of future success though, previous generations didn't really have the distribution models required to match the type of services that were available on PC before.
As for anyone who wants one being able to get one. Well, that's part of the problem, you need to already want one. The casual market in general tends to only realise they want a specific game as a result of the game being marketed to them, if you won't be made aware of new releases without actually going to a shop to check for them, then I don't see it as very surprising that most don't take this option.
Their preferences are based on F2P, and netcafe model.
People don't make that much over there, and these games allow them to spend a few coins here and there to enjoy the contents that these games offer them.
And of course, privacy on PC is easier.
We will see though if buying a console "legitimately" actually affects anything.
But if it does, the Playstation and Nintendo brand will reap the reward more than the XB. Those two brands are very well known, even to my grandma living oversea since PS/Nintendo stuff are always in their movie as reference/parody.
F2P is likely to have plenty of console options over the course of this gen, so I don't see that being an issue.
I didn't actually specify that I believed the Xbox would be the console to benefit most, so I'm not sure why that needed to be a part of your response. I personally think Xbox Live Gold is a far bigger problem than brand recognition though. You can establish a decent presence in a surprisingly small amount of time (Sony with the original PlayStation for example).