Microsoft’s Xbox One China strategy is, “plan that’s going to cost them dearly,” says McGee

By Dave Cook
1 May 2014 08:21 GMT

Microsoft has announced that Xbox One is headed to China in September, and so far we’ve seen a few industry figures casting doubt on the move. American McGee’s studio Spicy Horse is based in Shanghai, and he’s posted a run-down of he believes that the strategy is fraught with danger.

It follows comments from IHS consultant Piers Harding-Rolls, who warned that Microsoft’s China plan has no guarantee of success.


Over on Facebook, McGee wrote, “It’s a good thing Microsoft is rolling in cash, because they’ve just made announcement of a plan that’s going to cost them dearly. Of course no one reporting on this is any wiser to the blunder than Microsoft,” before proceeding to give a run-down of reasons why the plan is flawed.

He began by saying that consoles have already been available in China for years, and one glance at the nation’s equivalent of Amazon TaoBao confirms this to be true. “There is NO effective [console] ban,” he added.

“The set-top box market is ALREADY SATURATED,” he added. “‘Set-top box’ is the #1 selling point of the Xbox One in announcements related to the China launch – with BestTV as their local partner. XiaoMi and other local brands already control this business and offer better, cheaper boxes built atop Android-powered dedicated devices. Oh, then there’s the fact that 99% of streaming content is consumed on mobile devices or PCs.”

He then flagged up China’s rampant piracy issue, which is also well-documented and poses a threat to Microsoft’s plans to establish a legitimate market in the country. Censorship by the state was also noted as a potential concern.

“Any console shipped out of the Shanghai [Free Trade Zone] will be unable to play any games other than those approved by the Ministry of Culture (and other media oversight bureaus),” McGee went on. “That means content for the device will be limited and inferior to what could be had by purchasing a black-market console on Taobao. Chinese consumers are wise to hardware/software restrictions and prefer to purchase ‘rooted’ devices whenever such restrictions are put in place.

“I could make more points… Chinese consumers are addicted to mobile phones, gamers get their kicks online, consoles are dead, etc, etc… but there’s no stopping a dinosaur!”

We’ll have a detailed report with McGee and other industry figures on Microsoft’s move into China soon. Stay tuned.

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