Five reasons the Xbox One will fail in China

3 min read

Chow yun pirate

Good old American McGee – despite his patriotic sounding name, the veteran game developer in charge of Spicy Horse lives in Shanghai and has some rather specific thoughts about Microsoft’s chances at success in China. They aren’t too optimistic, and they hit the nail right on the head.

Using the wonderful platform that is Facebook, McGee laid out his five reasons that the Xbox One will fail in China:

  1. Console ban was ineffective – consoles and games already available
  2. Set-top box market already saturated – tons of cheaper, Android-powered devices readily available
  3. Piracy – it’s massive and awe-inspiring in China
  4. Cultural/Audience disconnect
  5. Censorship and restrictions on content – with such tight censorship, consumers would rather go through black market or pirated consoles (see points 1-3)

I think most of the points are fairly self explanatory, which is why I want to look a bit more at the fourth. What does he mean by cultural/audience disconnect? Well, his full explanation is:

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.

Much like piracy, if you haven’t seen the study-driven mentality in China with your own eyes, it’s hard to believe. Culturally, it is expected that from a ridiculously early age (and no, McGee isn’t exaggerating by saying it starts at age three) the primary focus will be on academics and academically oriented extra murals. Have you seen that video that went viral of the little Chinese boy playing piano? It’s impressive, of course, but it’s also indicative of the expectations parents place on their children in China. Assuming the family can afford it, any and all resources are spent on securing the child’s future through studying and specific extra activities – console-based entertainment simply doesn’t feature as a priority for parents.

Microsoft is only planning to sell about 100k consoles in China. A ridiculously small number considering the population size. I suppose this means that Microsoft knows that it won’t sell well in China, but it makes me wonder what’s the point of localizing the console if they know it won’t do well. It will be released in September in China – the same time as its release in South Africa. Which market do you think will be more receptive to it?

I’m certainly excited to get my hands on the console, but how many will sell locally?

Last Updated: May 2, 2014

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