Sony Corp will bring its PlayStation consoles to China through two joint ventures, its Chinese partner said yesterday, as the Japanese gaming giant seeks to tap a newly opened market.
China in January authorized the domestic sale of game consoles made in its free-trade zone (FTZ) in Shanghai, opening a market with an estimated 500 million potential players to companies including Sony, Microsoft Corp and Nintendo Co.
The state-owned tourism and culture firm Shanghai Oriental Pearl (Group) Co (東方明珠), owner of the Oriental Pearl Tower, said it would set up two joint ventures with Sony in the FTZ, one for hardware and one for software and services, according to a statement filed to the Shanghai Stock Exchange.
Photo: Bloomberg
Sony is to take a 49 percent stake in one venture and 70 percent in the other, the statement said, to make and market PlayStation consoles and related software in China.
Sony confirmed the announcement in an e-mail to reporters.
Despite the news, Oriental Pearl stock closed down 0.54 percent in Shanghai trading yesterday. Sony shares ended up 3.12 percent in Tokyo trading.
“Sony’s entry into the China market can broaden sales,” Tokyo-based UBS AG analyst Ryosuke Katsura said by telephone. “PlayStation 4’s online game network service can help the company avoid piracy issues that are more prevalent with packaged games.”
Both ventures will introduce “quality and healthy” gaming products, the statement said, an official requirement for selling in China.
Some foreign industry officials fear that such regulatory approval — conceivably to censor game content — could be used as a potential trade barrier.
Microsoft said late last month that it was to offer its Xbox One game console in China in September through a joint venture in the FTZ.
Nintendo president Satoru Iwata said this month the company plans to expand in emerging markets with new devices starting next year. The Kyoto-based company is studying the regulations regarding entry into China, Iwata said in an interview on May 7.
The relaxation of the decade-long sales ban does not apply to console imports, though the devices are already widely available after being smuggled into China.
China’s game revenue jumped 38 percent year-on-year to 83.2 billion yuan (US$13.34 billion) last year, according to one industry estimate, although the market was dominated by online games.
Analysts say Chinese consumers are unlikely to want to pay high prices for foreign consoles and authorized software, especially if it is slow coming to the market.
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