Microsoft and Sony released their latest video game consoles in China last year to a great deal of excitement from industry mandarins, but all of that excitement seems to have been totally misplaced.
Both the Xbox One and PS4 sold far less than expected even though the market was supposedly ripe for the picking.
China is very unusual, in that most people play video games on PCs since the sale of consoles was banned by the government.
There?s been a fairly large grey market in the country, but it has never been able to make a dent in the immense PC gaming market in the country.
Video game console manufacturers have had a rude shock in China because of their inability to make the kind of money that was projected in a market that has 515 million video gamers.
The sales figures for Xbox One and PS4 in China have been embarrassingly low; both consoles have only managed to sell 550,000 consoles all put together, the last year instead of the flood that was expected.
In contrast, Sony will sell 34 million of its consoles all over the world and Microsoft will sell 20 million.
There are quite a few reasons for the miserable performance of these consoles apart from their market?s unfamiliarity with them.
The Chinese government hasn?t helped their cause at all, because there are limits on the numbers of games that are available on the consoles.
The Chinese government prefers to restrict the number and type of video games available in the country because of fears that impressionable minds will be ?corrupted?.
As a result, none of the bestselling video games from either of these companies are available in this country.
Price is another important factor in the cost conscious Chinese market, and games for PC are available at very low prices.
There are cyber cafes all over the country where people spend hours playing their favourite video games for free.
In fact, it?s the freemium games that do the best in China, with players willing to make purchases occasionally as long as the amount is not too much.
Most people in this country would simply be unwilling to buy console games at full price, even if they managed to spring for the console.
While both Microsoft and Sony have their work cut out for them in the incredibly difficult market that is China, Sony might have an edge over its rival.
J Pop and other elements of Japanese culture are quite popular in China, and Japanese video games have a natural fan base here.
As a matter of fact, the Chinese avidly devour manga and anime. Even so, both companies have to chalk out a new strategy that helps them address the needs of the market that doesn?t seem likely to change in a hurry.
Interestingly, even many third-party video game publishers are changing their strategy to suit the market and they are offering their most popular console games to meet the requirements of the free-to-play PC market.