Sony and Microsoft were eagerly waiting for the Chinese government to lift its ban on the sale of video game consoles in the country, which was in place since the year 2000, but these companies unfortunately haven?t been able to get the results they were expecting.
The Chinese customers have been extremely disappointing for these two companies even though they were very quick to enter the market with the PS4 and Xbox One.
These consoles were already available in the grey market, but here too the numbers are expected to drop almost by half.
According to a report released by Niko Partners, the latest video game consoles from Sony and Microsoft are unlikely to sell more than 550,000 all put together this year.
This is nothing compared to the 34 million units of PS4 and 20 million of Xbox One that will be sold all over the world during the same period.
There are quite a few reasons for these disappointing numbers in a country, which is one of the biggest markets for all sorts of electronic goods.
For one, they are priced slightly out of reach of the famously price-sensitive Chinese customer.
Both consoles are priced at around 2999 RMB, but Chinese customers are just not biting.
Another reason is the lack of attractive titles. Most of the popular games won?t be able to go past the Chinese censors on account of their graphic violence.
The console manufacturers have no option, but to address these issues if they are to make a dent in this market.
Games from the Call of Duty and Grand Theft Auto series will soon be available in China and this should hopefully help boost sales.
The most important factor of all is that the Chinese market is simply not used to the idea of playing video games on consoles. There is an immense appetite for video games in China, but most people prefer playing them on their smartphones and PCs because this is what they are accustomed to.
As a matter of fact, there is immense demand for games that are free to play, even if people are willing to spend real money to buy virtual goods.
The Chinese are also clearly willing to spend a lot of money on TV-based games. It is estimated that the total revenue from these games will top $654 million this year and the number will increase to a whopping $3 billion within four years.
The video game market in China is very different from the rest of the world on account of its enforced isolation.
The preferred platforms here are smart televisions with Android set-top boxes. There are many local companies that manufacture Android-based hardware, which can be used to play locally developed games, the Obox being a case in point.
Interestingly, these platforms for video gaming haven?t been embraced by customers in Europe and the United States.
It is very clear that the Chinese market has to be approached in a unique manner if at all video game console and content manufacturing companies want to make headway here.