No China XBX1 This Week

Microsoft China’s Xbox general manager Enwei Xie (front left) and Microsoft corporate vice-president of marketing Yusuf Mehdi (front right) last July in Shanghai.

Microsoft China’s Xbox general manager Enwei Xie (front left) and Microsoft corporate vice-president of marketing Yusuf Mehdi (front right) last July in Shanghai.

SEPT. 22, 2014 • The Xbox One is not launching in China on September 23 after all. In a statement issued in China, Microsoft Corp. said despite making steady progress more time was needed before launching the console. At first the company said it was shooting for a launch by the end of the year, but on September 23 issued a new announcement that the system would launch on the 29th of the month with 10 digitally distributed titles. No reason was provided to explain the delay. Microsoft China’s Xbox general manager Enwei Xie said the Chinese government had approved these 10 games and that the console maker would continue to work to bring more titles and other entertainment content to consumers. Xie promised that people who preordered the Xbox One before the 23rd will still receive the first units when they start shipping next week. Preorders through major Chinese online retailer JD.com were 499 yuan ($81). To help compensate for the extra wait, those who preordered will also receive a yet-to-be-announced added bonus. The Xbox One is priced at 3,699 yuan ($603) without the Kinect motion detector and 4,299 yuan ($700) with the Kinect,

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Impact: We get the impression that this delay was somewhat sudden in nature. On September 18, the Xinhua News Agency ran a news story quoting Xie saying the Chinese introduction had been more efficient than in any other country and that the first batch of the Xbox One products had arrived in China at the end of August and were ready for sale. Neither did Microsoft cancel its September 22nd Xbox One launch party at the Oriental Pearl Tower in Shanghai. Unfortunately the 100 lucky partygoers who win one of the consoles will get a voucher instead of the real thing. There are many possible culprits interfering with the scheduled Xbox One launch. An inability to deliver hardware does not seem to be one of them. The partnership with state-owned BesTV New Media Co. was supposed to smooth out the content review process by the Ministry of Culture but it is possible content is still undergoing review. It would not be the first time a Western company with a Chinese partner has been told to wait. China is also forcing Microsoft and Sony to region-lock their consoles to make sure only state-approved content is playable. Another possibility is that the Xbox One has significant online connectivity features that might be causing government concern. Chinese officials will want to be positive that the video game console cannot be used to circumvent controls on Internet access. Another possibility being proffered by Chinese analysts is that there may be some connection to the antitrust investigation of Microsoft being undertaken by the State Administration for Industry & Commerce. The company is being accused of a lack transparency on how it operates in China and there are concerns about the bundling of products. Some commenters with closer government ties suggest the Xbox One simply garnered too few preorders to launch the system. One more potential cause we can throw into the pot is that since the state-owned corporate parent of the two previously separate subsidiaries partnering with Microsoft and Sony is merging the divisions into a new entertainment group, some delay has been introduced that now affects the Xbox One launch. Take your pick… the takeaway is that Western companies seeking to do business in China do so at their own risk. The upside may be substantial, yet getting there will send you to a psychiatrist.