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TheStreet Open House

First Legal Xbox Sales Test Maturity of Game-Savvy China

Stocks in this article: MSFT NTDOY SNE

TAIPEI (TheStreet) -- Microsoft (MSFT - Get Report) has scored a landmark license to sell the Xbox One game console in China, where several million machines are expected to move in the first quarter or so. Stage two: More difficult.

China's nod to its first legally available gaming console such as the Xbox effectively lifts a 14-year-old ban on the high-end electronic toys. The country had prohibited the sales of most consoles to protect the mental health of young people, who may otherwise find the deliciously violent game content addles their attention to what Beijing cares about -- mastery of hard sciences and socialist ideology.

But Chinese gamers had already learned to order foreign-made console illegally on local e-commerce sites, says Gu Haoyi, game market senior analyst with the consultancy Analysys International in Beijing. A lot are content playing on PCs and smartphones instead. Is the game for consoles over before it starts?

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Microsoft has cozied up to China since last year with an out-of-the-way research and development center, and Shanghai-based manufacturer BesTV New Media said in April that it will bring Xbox One to China in September. Microsoft got an elusive China Compulsory Certification from the government, valid until 2019, the official China Daily newspaper said on its website.

Any measure of success will beckon rival game console makers such as Sony (SNE) and Nintendo (NTDOY), which had also been blocked from selling in China, the paper noted. Chinese developers may start to make their own consoles, Gu said, though so far the Xbox One is peerless in China.

Microsoft sold 7.4 million Xbox consoles to retailers in the fourth quarter last year, including 3.9 million Xbox One consoles.

An old hand at forming partnerships in China, Microsoft will take Xbox One pre-orders through popular Chinese Internet icon Tencent Holdings (TCTZF) and online retailer JD.com, China Daily noted.

The console stands to rack up a high score in China given the 1.3 billion population country's fast-growing $13 billion gaming market. Several million Xbox Ones will sell in China during the product's first few months, Analysys International predicts.

Still, Microsoft's license, comfort level in China and pre-order channels do not necessarily mean that Xbox will win the console sales game.

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