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Competition in the Gaming Console Industry Intensifies in China

| Jan 12, 2015 07:18 AM EST

xbox one China.jpg

China is said to have opened its gaming console market in 2014 for foreign companies to come in after 14 years of banning the said product.

This creates a new market for multinational companies such as Sony and Microsoft, two of the most distinguished players in the gaming console industry. With easy entry into the mainland now guaranteed, a lot could change in the business dynamics of the gaming console industry in China.

In early 2014, China proclaimed the country an open market for gaming console firms all over the world. The country did declare some guidelines that it wants firms to strictly adhere to, but the massive possibility China offers to gaming console industries makes following these strict guidelines worthwhile.

Sony and Microsoft immediately entered the market, engaging with local game developers to market their games in the region without going beyond the rules and boundaries set by China. 

Microsoft had a little bit of an upper hand because it enjoyed the first move advantage. It entered China first, with Sony following suit shortly after. With this advantage, launching its Xbox one in Sept. 2014 did it some good, as it sold almost 100,000 gaming consoles just in the first wave of its release. Still, Sony has the price advantage between them, because Sony's PlayStation 4 only costs around $468 against the Xbox's steep price of $600.

Even though their competition is fierce, one is not doing worse than the other. Both of them are doing quite well now in the industry and are anticipating bigger growth in the future. The problem is that they both have to contend with the rising popularity of cheap online games in China.

It remains to be seen if the giants would know how to change their marketing efforts in order to satisfy the palate of Chinese consumers and gain prominence in the country, one that has not really been playing these consoles for the last 14 years.

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