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American McGee on Microsoft's Decision to Release Xbox One in China

K

KillerIsJed

Member
AmericanMcGee said:
It's a good thing Microsoft is rolling in cash, because they've just made announcement of a plan that's going to cost them dearly. Of course no one reporting on this is any wiser to the blunder than Microsoft, so here are my Top 5 reasons why Xbox One will fail in China:

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.

2. The set-top box market is ALREADY SATURATED. "Set-top box" is the #1 selling point of the Xbox One in announcements related to the China launch - with BestTV as their local partner. XiaoMi and other local brands already control this business and offer better, cheaper boxes built atop Android-powered dedicated devices. Oh, then there's the fact that 99% of streaming content is consumed on mobile devices or PCs.

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.

4. Cultural/audience disconnect. The target market of kids/young-adults from middle-class/wealthy families don't have free time to spend on console games (or TV/movies). Between the ages of 3~22 years of age they are heads-down with study, school, and extra-curricular activities that will increase their chances of competing successfully against others in the super-hot Chinese job market. Those that aren't studying don't have money to spend on a console.

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.

(I could make more points... Chinese consumers are addicted to mobile phones, gamers get their kicks online, consoles are dead, etc, etc... but there's no stopping a dinosaur. I'll just leave it at 5.)

Here's the slick promotional video from Microsoft and BestTV:
http://www.gamespot.com/videos/xbox-one-coming-to-china/2300-6418565/

Hey Sony, you know better than to follow Microsoft into this punji pit, right? Right? Sony?
Click to expand...
Source

I don't typically agree with or like many things that American McGee says, but he lives in China and has a perspective that most of games media won't be able to give on this subject.

So what say you? Microsoft burning money and making a huge mistake? Is Sony playing it cool again and seeing if Microsoft fails, or how China reacts to Microsoft?
 
T

Tallshortman

Member
Well yeah it's extremely easy to get a console off the "grey market" there and for not much more than what official retailers would sell them for. I don't think it will do MS any real significant business mainly because most of the audience there is into PC gaming more but unless they start burning through cash for ads I don't see it hurting them either.
 
J

jayu26

Member
Okay I will admit that China is fucking wild card in all this, but Microsoft (and for that matter Sony) have to at least try.
 
N

Nzyme32

Member
All true, and exactly why China is a tricky market. It is a wonder whether the cost of the China Xbox one sales will actually get any where close to break even with the cost of launching in the fisrt place
 
L

LurkerPrime

Member
There is a market in China, and the first company that breaks through will reap untold fortunes. I can't really fault any company for trying, but it will be difficult.

I doubt the XBOX ONE will be the breakthrough product, (un)fortunately.


Anyways, please keep making games American McGee! I've never played any of them and probably never will, but I want to have a reason to say "Spicy Horse" for many decades to come. (It's probably the best company name of all time, after all!)
 
E

explodet

Member
American McGee said:
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.
Click to expand...
Piracy? In China?
Get out of here.
 
S

stryke

Member
Doesn't 5 somewhat contradict 1? Shouldn't be too hard to find the games that are "banned".

Edit - oh he says back to point 1 & 3. Nvm
 
G

Gbraga

Member
I think point #5 is the most important one. Consoles and games were easily available on the grey market here in Brazil before they came officially as well, but it was only after they came that we started to see a flood of brazilian portuguese localized games and at prices that are in some cases not only better than they would be if grey market was the only option, but even better than the US prices, which would be considered a ridiculous idea a few years back. Hell, I've only got The Last of Us digitally because I really prefer digital games, it would actually be a bit cheaper to pre-order it here. Around 09 importing it from the US, UK and Canada were my only options to pay a decent price, and it could take up to two months to arrive.

Grey market sales won't count as sales coming from your country, so they can't have better offers for your country if they're not making any money there and have to perspective of doing so.

That being said, he definitely knows China more than I do, so it is possible that what was relevant for my country may not matter at all there.

explodet said:
Piracy? In China?
Get out of here.
Click to expand...

Is piracy already available on the new consoles though? If not, that shouldn't really matter for now.
 
K

KillerIsJed

Member
stryke said:
Doesn't 5 somewhat contradict 1? Shouldn't be too hard to find the games that are "banned".

Edit - oh he says back to point 1 & 3. Nvm
Click to expand...

In a way, but from what he is saying, I believe he means the consoles that come out will be restricted to ONLY playing certain games, so even if they find them, the console won't play them. The black market imported consoles would be able to, though.
 
T

ToraShiro

NISA
China is the next big market. If you want to see major growth in this industry it's either coming from South America or large swaths of Asia next.

You can't fault them for going after what you, personally, and in anecdotal terms, relate to as a bad deal. The view is obviously very different from where they are standing. Also, I somewhat see this as someone who has a stake in the current open market to China (F2P, mobile) trying to be dissuasive of the competition. A little Ben Cousins, as it were.
 
MaulerX

MaulerX

Member
So he's basically saying that the big 3 shouldn't even try because consoles are already easily accessible via the grey market? Doesn't make sense because the games themselves are illegal unless they conform to the laws. As much of a pain in the ass as it is, conforming to the laws is what will drive broader market penetration.
 
D

Doombacon

Member
stryke said:
Doesn't 5 somewhat contradict 1? Shouldn't be too hard to find the games that are "banned".
Click to expand...

Games will almost certainly be banned on the console level for the Chinese release consoles which makes the black market consoles a better value. Also, I'm not sure how store regions are handled on XBL but I doubt a console with the ability to purchase from other regions digitally would be allowed for normal retail in China.
 
T

travisbickle

Member
I expect it to be one of those great business stories of the future, great because of how ridiculous it was in retrospect with crazy stories about Phil Spencer in Chinese meetings that will make or break the Xbox One and no one can speak English!!
 
D

daman824

Member
What he fails to realize is that microsoft already knows this. I doubt they are expecting to sell a ton of consoles in china.
 
P

Pain

Banned
I agree with all of the above. I doubt China will contribute any significant market share for any console this gen.
 
S

Speedy Blue Dude

Banned
Ehh... Microsoft already got rejected by like... 12 other countries. One more won't hurt.

No but really, I don't expect Microsoft to be successful in China, I hope they are, but I can't see it. I don't believe many citizens will be very excited to purchase an expensive console, and then purchase expensive games when they're so used to cheap/free games via PC/Mobile.
 
E

explodet

Member
Gbraga said:
Is piracy already available on the new consoles though? If not, that shouldn't really matter for now.
Click to expand...
The new consoles haven't been hacked yet. And that's why they'll probably not sell very well at first, if at all.

The Chinese market will either stick with the 360 which was hacked a long time ago, or some company will release a Ybox Wan that plays dirt cheap games.
 
G

Gbraga

Member
explodet said:
The new consoles haven't been hacked yet. And that's why they'll probably not sell very well at first, if at all.

The Chinese market will either stick with the 360 which was hacked a long time ago, or some company will release a Ybox Wan that plays dirt cheap games.
Click to expand...

Man, I wish the Xbox One was called Xbox Wan. Much better.
 
T

ThoseDeafMutes

Member
I'm confused. Are people all playing pirated games and blowing money on F2P shit on PC, or are they too busy head down studying and working 24/7 to play anything?

Surely they can't be both.
 
D

dazzlerazzle

Banned
hqdefault.jpg


Chinese version of xbox will come in red and X will be replaced with star
 
C

Citizen_Insane

Member
I wonder how many they would have to sell to make a profit on all the money and work it would take to bring it over there. Localization, partnerships, etc.

I kinda doubt it would be worth the trouble, but who knows. Must be worth the investment to Microsoft.
 
T

ThoseDeafMutes

Member
Bam Bam Baklava said:
The people who aren't busy studying are playing pirated games.
Click to expand...

Having lived with Chinese exchange students for over a decade now, I can assure American McGee that they find time for both gaming and study.

:lol

The trick is going to be getting pricing structure right. There isn't a preexisting massive console market so they will have to think about what they're offering seriously. But it's certainly not an automatic financial disaster.
 
K

Kenshin001

Member
I disagree. If the console is positioned as a premium product, a status symbol, then it could do well. There are plenty of Gucci knock offs but China is now the second biggest market for luxury goods.

His points are all over the place. There are plenty of consoles on the grey market yet no one plays them because they are too busy studying? That ignores that most console users are adults in their 30s anyway and the PC market is huge.
 
A

Archaix

Drunky McMurder
ThoseDeafMutes said:
Having lived with Chinese exchange students for over a decade now, I can assure American McGee that they find time for both gaming and study.

:lol
Click to expand...

But as per point #3, they all use pirated clocks that are notorious for only having 20 hours in a day. It's just not feasible, you see.
 
Mikey Jr.

Mikey Jr.

Member
I know nothing about Chinese gaming over there, so its hard to give an opinion.

I'm assuming MS and Sony both looked at the Chinese market and know the risks and rewards.
 
L

licktheenvelope

Member
MaulerX said:
So he's basically saying that the big 3 shouldn't even try because consoles are already easily accessible via the grey market? Doesn't make sense because the games themselves are illegal unless they conform to the laws. As much of a pain in the ass as it is, conforming to the laws is what will drive broader market penetration.
Click to expand...

Microsoft is going to take on government bribery in China?

Hrm...
 
D

Dreamgazer

Member
Many good points were already covered in this thread:

http://www.neogaf.com/forum/showthread.php?t=810454&highlight=

Gbraga said:
That being said, he definitely knows China more than I do, so it is possible that what was relevant for my country may not matter at all there..
Click to expand...

Yeah, the grey market situation in China is quite different from Brazil and the various European countries. Prices actually tend to be in the grey market's favor. You can easily get a Japanese PS4 in the Chinese grey market now at less than <$350 USD (and I'm being modest about that figure.) Official MSRP usually end up being higher for the HK/TW regions also. The only advantage of the manufacturer's direct involvement is special event promotion and bundle deals.
 
K

klee123

Member
Bam Bam Baklava said:
The people who aren't busy studying are playing pirated games.
Click to expand...

Or online games.

The subscription or F2P model are the only sustainable methods in China. Anything else would probably be pirated to hell.

Which brings to the point of the current consoles since they aren't hacked yet, I doubt they'd be very popular over there.
 
T

Tommy DJ

Member
ThoseDeafMutes said:
Having lived with Chinese exchange students for over a decade now, I can assure American McGee that they find time for both gaming and study.

:lol

The trick is going to be getting pricing structure right. There isn't a preexisting massive console market so they will have to think about what they're offering seriously. But it's certainly not an automatic financial disaster.
Click to expand...

Yeah that's my experience having lived with some and done an exchange in HK. They game pretty darn hard but always the MOBA type.

He's pretty much right in most points. Most people stream their shit off PPS or cheapass FREE streaming devices like the TVPad. Unless Microsoft gets pricing perfect, who the hell is going to buy their box over a PC that can play LOL?
 
C

ChoklitCow

Member
I think these are some great points, but in reading them it gives off the feeling that Microsoft is going to be blindsided by these. Considering how long they have been working on this, they know the risks.

I've always felt this is just a small step as they try to creep into the Chinese technological market. As someone mentioned, it is a market with billions of people. I don't agree that it is the next big market for gaming, as people have mentioned it is already saturated with gaming.

As for what product they long-term want to sell there, who knows. Could it be just the brand in general? I don't think Microsoft ever assumed it was going to remain consoles.
 
T

TomShoe

Banned
ThoseDeafMutes said:
Having lived with Chinese exchange students for over a decade now, I can assure American McGee that they find time for both gaming and study.

:lol

The trick is going to be getting pricing structure right. There isn't a preexisting massive console market so they will have to think about what they're offering seriously. But it's certainly not an automatic financial disaster.
Click to expand...

Of course not! It's just a probable financial disaster.
 
B

Bishop89

Member
If price is a huge factor, then they would probably have to do something about how much live cost....but if they lower the price of live there, they will have to everywhere else otherwise a shitstorm will ensure
 
IISANDERII

IISANDERII

Member
Oh hello internet!

Anyway, it's a long shot but Microsoft is desperate. Once in a while a Hail Mary will connect, that's why they toss them instead of just taking a knee.
 
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