Microsoft delays Xbox One sales in Chinese mainland

Antitrust probe, weak pre-orders seen as factors

The launch of the Xbox One has been delayed in the Chinese mainland, as Microsoft said over the weekend that it would need more time to prepare for the game console's entry into the Chinese mainland market, while experts attributed the delay to several factors.

The game console was supposed to make a great entrance into the mainland consumer market on Tuesday. But on Sunday, Microsoft announced in a statement on its official Sina Weibo that the landing of the Xbox One in the country is expected to be due by the end of the year.

"We need to reschedule the launch" to deliver better gaming and entertainment experiences to Chinese users, said the US software veteran.

Some analysts said Chinese regulations probably would be a main reason why the US software company decided to halt the launch.

It seems likely the timing is not good now for the introduction of the Xbox One as the company is under a Chinese antitrust probe, Xue Yongfeng, an industry analyst with Beijing-based Analysys International, told the Global Times Sunday.

On September 1, the State Administration for Industry & Commerce confirmed that Microsoft is under antitrust investigation over alleged transparency issues and sales bundling.

"Against such a backdrop, games or content which would be played on the Xbox One may still be undergoing censorship review," said Xue.

China lifted the 13-year-old ban on selling foreign video gaming consoles in January on condition that the console's games would undergo content examination by the Ministry of Culture.

In order to work with the policy, Microsoft's Xbox One sold in China would be region-locked to prevent disapproved games, media reports said.

Xue also predicted that the sudden delay may harm the company's brand in the booming gaming sector, which would be detrimental for the company's attempt to profit from the industry.

Following the news, some Chinese gamers who had already pre-ordered the Xbox One were very shocked and even a little angry.

Zhu Jiang, a white-collar worker in Beijing, pre-ordered the device via China's second-largest online retailer JD.com Inc in early August with a prepayment of 499 yuan ($81.30).

"I feel like I am being fooled by Microsoft. Now I have to wait, because I cannot cancel the order," Zhu told the Global Times Sunday.

Li Yi, secretary-general of the China Mobile Internet Industry Alliance, attributed the delay mainly to China's lukewarm reception for the Xbox One.

Thanks to Microsoft's cooperation with BesTV New Media Co, the content censorship on Xbox One would go smoothly, Li told the Global Times Sunday.

BesTV, a new media arm of State-owned Shanghai Media Group, set up a joint venture with Microsoft in the China (Shanghai) Pilot Free Trade Zone in September 2013 to help develop and sell Microsoft's game consoles in China.

"Microsoft likely thinks they need to devote more time and effort to marketing and sales channel expansion to attract consumers after witnessing unsatisfactory Xbox One pre-order numbers," said Li.

According to a press release posted on Microsoft's website, Chinese consumers are allowed to pre-order the Xbox One, starting from July 30, via the company's site and online shopping platforms such as jd.com and suning.com.

The number of pre-orders was not made available to the public. Calls to PR representatives with Microsoft, jd.com and suning.com remained unanswered by press time. But according to Li, an unidentified senior executive from BesTV, told Li that the pre-order numbers were too small.

"I'm not surprised with the unsatisfactory performance of the Xbox One as it only offers a few free games and requires users to purchase most popular games, while China's price-sensitive game players have got used to lower-cost pirated game software," said Li.

Most Chinese gamers prefer free online PC games and mobile games, making game consoles a small niche market, he noted.

A report by a Chinese industry group for game publishers GPC shows that 51.5 percent Chinese players played online games on personal computers in the first half of 2014, followed by mobile game players who accounted for 25.2 percent.