Electronics salesman Min Shushan can talk for hours about the merits of Sony's PlayStation 2 (PS2) versus Microsoft's Xbox, having taken apart hundreds of consoles over the years to rig them for pirated games.
Customers at his glass-and-chrome specialty store in the heart of old Beijing can buy consoles made at Sony or Microsoft's factories in southern China and prep them to play hundreds of copied games from "Tomb Raider" to "Final Fantasy."
"Any title you want, we can get you," Min boasted, riffling through a box of pirated game CDs wrapped in plastic.
"We have everything they've ever made," he said, offering to sell any title for the equivalent of US$0.85.
"Don't worry, the consoles are the real thing, `factory direct' so to speak," he added with a smile.
Min said that the consoles were obtained through "illegal means" but were not stolen.
Resourceful pirates have taken a big bite out of business for Sony Corp, Microsoft Corp and Nintendo Co, whose official games retail at between 200 yuan and 500 yuan (US$24 to US$50) in China. Players say they wouldn't even consider paying those prices.
Sony's PS2 strategy in the country has got off to a rocky start. It delayed the launch to Jan. 1 from mid-December and when it did go on sale in Shanghai and Guangzhou, Sony only had one software title to accompany the console.
The number of official PS2 game titles for the Chinese market has grown to six and Sony is looking to foster relationships with local game developers, but this has done little to boost sales.
TOUGH ROAD
An official at Sony Online Entertainment (SOE), a business that focuses on online computer games and is separate from the company's PlayStation arm, Sony Computer Entertainment (SCE), said the PS2 was not doing well in China.
"It's going to be a very tough road for the PlayStation guys to enter China and actually build a business," John Needham, SOE's chief financial officer, told a forum at E3, the game industry's annual trade show held earlier this month in Los Angeles.
Sony Online knows all too well about the perils of the Chinese market after its popular online role-playing game, EverQuest, failed to catch on with China's gamers, because it did not cater to local tastes.
SCE has not disclosed shipment figures for the Chinese market, except to say it sent 4.28 million units to Japan and the rest of Asia in the business year ended March 31.
Another factor holding back Sony's success in China, Western industry watchers say, is the PS2's 1,988 yuan price tag, which is about a quarter of the average annual wage of an urban worker.
Chinese analysts and players say PS2 has been doing well on the black market for at least two years, thanks to entrepreneurial pirates who have whittled down the prices of individual games. Consoles sell for about 1,500 yuan unofficially.
SPOILT KIDS
They say China has no shortage of "Little Emperors," or only children, whose bourgeoisie parents are willing to spoil them. Those who can't afford the system have turned to Internet-based games, which also face intense competition from piracy.
Chen Danian, chief operating officer at Shanda Interactive Games Ltd, China's largest operator of online games, said it had benefited from the PS2's lofty prices.
"The scenario which occurs in the United States where the PS2 is cheaper than the PC just doesn't work over here," Danian said at the E3 forum, about the Chinese gaming market.
Danian said he believed the PS2 had officially sold between 200,000 and 300,000 units in China since its launch, but two or three times that number through "unofficial channels," such as Min's "Happiness Game" shop.
Microsoft, which has not officially entered the Chinese market with the Xbox, has said it is adopting a wait-and-see approach. Its software sales have been massacred by pirates who sell the newest versions of Microsoft Office for 6 yuan.
"It looks like a good opportunity for us, but we want to make sure that when we do enter we do it with the right regulatory process and have the right content," said Alan Bowman, Microsoft's Xbox general manager for Asia-Pacific.
Businessmen like Min say they are not worried about the entry of the game giants.
"Sure, they can sell their official consoles here, but can they handle pirated games? I don't think so!" Min said.
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