Microsoft has marketed a Chinese New Year bundle, but couldn’t sell it in China.

JULY 29, 2010 • The Shanghai Daily reported that Microsoft China has requested approval from Chinese regulators to sell the Xbox 360 in the country. No timetable has been established since Chinese agencies often evaluate such submissions at their own pace.

Impact: The Chinese government banned console systems back in 2000. However, there have been exceptions like the Nintendo iQue. Meanwhile, there is a strong black market for bringing in game systems from outside of China. The goal in launching a legitimate console would probably be to focus on pure digital distribution delivery of content.  At this stage in the Xbox 360’s cycle, entering China with the more online-oriented Arcade model might make a lot of sense. If Microsoft can make these units cheaply enough in-country, and encourage Xbox Live as the primary content source, millions of units could be sold. Selling actual retail discs would have to be shunned in this scenario, since the 360s DVD format is so easy to pirate. Yet at the right low price, we can see cutting out the traditional software model in favor of a hardware-centric approach.