Current Xbox One pricing in China.

DEC. 16, 2014 • A recent price reduction plus some attractive software bundles helped Microsoft Corp.’s Xbox One to take the No. 1 spot in hardware sales during November in the U.S. Now with the looming arrival of the PlayStation 4 in China at 2,899 yuan ($469) and 3,299 yuan ($533) with the PS4 Camera come January 11, BesTV New Media Co. (Microsoft’s Chinese partner) has lowered the price of the two least expensive Xbox One China SKUs by 500 yuan ($80) each. Without the Kinect the Xbox One is now priced at 3,199 yuan ($517), and 3,799 yuan ($614) with Kinect. The Day One Limited Edition that includes two extra games plus a special controller remains at 4,299 yuan ($695).

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Impact: Even with these price reductions the Xbox One in China will still suffer from a significant price differential with the PlayStation 4. We just don’t know how much an effect that difference will have on sales in China. The big limitation on both systems is Chinese government regulations on content. Sure there are innocuous Western launch titles such as Forza Motorsport 5 and Powerstar Golf for the Xbox One or Driveclub and Little Big Planet 3 on the PS4, but what’s filling in the slates on both consoles often are enhanced ports of mobile titles already available in the market. Sincere promises for more and better current generation console games from the West and from within China aside, right now there just are not compelling reasons to buy either of these Chinese market systems. Each is region-locked so only official Chinese games can be played. A grey-market Xbox One or PS4 purchased in Hong Kong can play every western game available, as well as localized titles for Taiwan and Hong Kong. Both Microsoft and Sony have committed themselves to a very long-term play. Success will not come quickly or easily in China despite both companies having allied themselves with the same state-owned partner. The upside potential is enormous, but the reality is it will have to be accomplished in a Chinese way on a Chinese timetable. Whether either company has the deep pockets to persevere through these limitations remains to be seen.