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John Bender · Feb 28, 2015

Xbox One distributor reports losses as sales fail to pick up in China

Foreign companies were banned from selling their consoles in China for nearly 14 years, but the country finally allowed Microsoft to do so last year. The company was given clearance to sell 5 million units of the Xbox One in China which were made available towards the end of 2014. However it seems that the Xbox One isn't doing very well in China: The company that Microsoft partnered with to sell the console has reported losses due to the deal.

In October, Microsoft announced that it had sold 100,000 units at launch, which remain the only sales numbers coming out from the company for the China market. Now, BesTV, the Chinese company that was responsible for distributing the Xbox One console, has reported a loss of nearly $2.75 million with its Xbox One division.

Full article here

edit.:

Is the division only about Xbox One?

v

ZhugeEX said:
I've just had a look at the PDF.

It's certainly talking about Bes TV Xbox division for hardware, software and entertainment apps distribution on Xbox.

On page 139 it mentions that Xbox division specifically with a loss of 17,244,756.7 yuan.

The company seems to be related to hardware, software and services just on Xbox One according to the PDF. They say it's basically joint with Microsoft.

The quote from the PDF is quite literally - "The company set up a joint venture with Microsoft co-Shanghai Information" and they describe the revenue as for Xbox hardware, software, services, marketing etc.... Basically only Xbox and MS stuff

ricelord · Feb 28, 2015

not looking good.

gigantor21 · Feb 28, 2015

Didn't sound like it was doing that well, so I guess it's not surprising.

kabel · Feb 28, 2015

Who would know....

Krejlooc · Feb 28, 2015

China is pc land for obvious reasons. How is the ps4 doing? Has it launched in china yet?

Gestault · Feb 28, 2015

Am I remembering right that part of the stipulation to allow major console sales was that a domestically-owned Chinese company had to be in place as the retail "supplier"? This is a funny turn of events with the backfire.

GSG Flash · Feb 28, 2015

kabel said:
Who would know....

Wasn't this in Japan?

John Bender · Feb 28, 2015

Krejlooc said:
China is pc land for obvious reasons. How is the ps4 doing? Has it launched in china yet?

No. Launch got delayed.

GSG Flash said:
Wasn't this in Japan?

Yes

The Shogun · Feb 28, 2015

Haven't they only released like 10 games for it in China?

Makes sense its bombing why would someone buy one?

Momentary · Feb 28, 2015

China and Korea love PC. Pretty sure PS4 will bomb too.

SwiftDeath · Feb 28, 2015

Not too surprising I think

ZhugeEX · Feb 28, 2015

Just so we can be clear here.

The Xbox One 100,000 number is a sold in number and not a sold through number.

And to be honest it's fairly meaningless as when it comes to China market the official sales numbers don't tell the whole picture. Plenty of people already have PS4 and Xbox One through grey market even though X1 is available officially and PS4 will be shortly available.

Also a lot of stores have sold through the day 1 inventory of PS4 despite clearance not being given yet.

China is a hard market to crack and people expecting "millions to be sold" know nothing about the market. Even IDC predicted that 1 million total cumulative sales between X1 and PS4 in 2015 would be a challenge and I would agree with that.

On average there are around 1.5m total consoles sold in to China each year including a mixture of last gen, current gen and locally manufactured consoles. Peak years see over 2 million (usually when new consoles come out) and tail end years see just over 1 million sales.

The China market is massive for PC gaming (number 1), Online gaming (number 2) and mobile gaming. Where as console has never taken off there, due to bans etc... Now as mentioned above there are ways around the ban such as grey import, but even then China users will mod or hack the console so that software and network revenues are non existent to Sony/MS/Nintendo.

As a reference, install base of Xbox 360 is said to be approaching 3 million units (may be over by now) but this really only sold in big numbers due to the mods and cheap/free downloadable games available

ArkhamFantasy · Feb 28, 2015

Is China really worth going after? The risks seem to outweigh the rewards.

Alebrije · Feb 28, 2015

In the land of piracy hardly a consolo will success.

CrazyDude · Feb 28, 2015

kabel said:
Who would know....

That hat makes no sense.

GeoramA · Feb 28, 2015

Who didn't see this coming?

Freeman · Feb 28, 2015

Well, so much for China saving the Xbox, what's next on the chalkboard?

Neuromancer · Feb 28, 2015

I guess only selling to 1% of the Chinese population wasn't good enough.

John Bender · Feb 28, 2015

ArkhamFantasy said:
Is China really worth going after? The risks seem to outweigh the rewards.

If Sony sells to just 1% of the population, they will have sold 100MM+ consoles and that is amazing.

Steel · Feb 28, 2015

CrazyDude said:
That hat makes no sense.

Beat me to it. The type of engrish that can come out of Japanese products is pretty amusing.

GeoramA · Feb 28, 2015

Neuromancer said:
I guess only selling to 1% of the Chinese population wasn't good enough.

onQ123 · Feb 28, 2015

They only needed 1% of the people to buy it & they would have won this generation easily.

Krejlooc · Feb 28, 2015

CrazyDude said:
That hat makes no sense.

Remember when they tried to teach borat that "not!" Joke from Waynes world? That hat is supposed to be that. It's saying hope: the worst situation... not!

Which is delightfully engrish.

Garrett Hawke · Feb 28, 2015

Is the 1% thing a NeoGAF inside meme or am I missing something

kabel · Feb 28, 2015

GSG Flash said:
Wasn't this in Japan?

It was and I think it's the same situation in almost every asian country.

fastford58 · Feb 28, 2015

Scratch China off the chalkboard.

Delusibeta · Feb 28, 2015

John Bender said:
No. Launch got delayed.

Wasn't it over the (planned lack of) region lock?

Although, to be fair, the predictions that China would be the next great console market immediately would inevitably result in horns.aiff.

mejin · Feb 28, 2015

Rayge said:
China and Korea love PC. Pretty sure PS4 will bomb too.

Maybe.

Playstation 4 has exclusives that might interest them: Dragon Quest Heroes, Yakuza, Disgaea, Toukiden, Persona 5, Bloodborn and more games developed by japanese developers. A whole set of games and support Microsoft does not have and there are more coming.

I'm not saying they are blockbusters but maybe they see it as worth it to have along side PC.

Wildarmsjecht · Feb 28, 2015

Neuromancer said:
I guess only selling to 1% of the Chinese population wasn't good enough.

Iunderstandthatreference.gif

Uncle Rupee · Feb 28, 2015

"You're only losing $2.75M on the Xbox One? Why, that's a bargain!" - MS exec

ZhugeEX · Feb 28, 2015

Garrett Hawke said:
Is the 1% thing a NeoGAF inside meme or am I missing something

You have to thank this guy for his wonderful post which started it all.
http://www.neogaf.com/forum/showpost.php?p=146830805&postcount=4286

Curufinwe · Feb 28, 2015

Garrett Hawke said:
Is the 1% thing a NeoGAF inside meme or am I missing something

It sounds familiar.

Derpcrawler · Feb 28, 2015

I'll tell you why - almost everyone interested go for HK imports. Why would you buy system with restrictions with only around 15 games available, when you can get umrestricted i,port for cheaper?

Sarobi · Feb 28, 2015

That 1% is really hard to come by

King Tubby · Feb 28, 2015

Man, who could've seen that coming?

KyanMehwulfe · Feb 28, 2015

My wife's company sponsored a Chinese New Year party and they gave away an Xbox One to one lucky draw winner....

So.... that's at least one

John Bender · Feb 28, 2015

Garrett Hawke said:
Is the 1% thing a NeoGAF inside meme or am I missing something

1

2

Lynn616 · Feb 28, 2015

Is Xbox One the only thing that the subsidiary company does? If not then it is impossible to know if it was caused by Xbox.

The Living Tribunal · Feb 28, 2015

kabel said:
Who would know....

Japan is a different country from China. Crazy, i know.

Banjo-Kazooie · Feb 28, 2015

The certification system and restrictions seem to be the biggest hurdle for the lack of games so far. I remember reading that there were something like 20 games ready to be released that have been held up in certification hell with China's video game certification board

Lynn616 said:
Is Xbox One the only thing that the subsidiary company does? If not then it is impossible to know if it was caused by Xbox.

They specifically say it was in the Xbox Division of the company though

John Bender · Feb 28, 2015

Lynn616 said:
Is Xbox One the only thing that the subsidiary company does? If not then it is impossible to know if it was caused by Xbox.

Read the OP again

TheHighFlyingBirds · Feb 28, 2015

Did they ship the 5 mil though? Its not very clear, if they did, then thats 4.9 mil shipped sat there collecting dust.

John Bender · Feb 28, 2015

jep_uk said:
Did they ship the 5 mil though?

No

Lynn616 · Feb 28, 2015

Banjo-Kazooie said:
They specifically say it was in the Xbox Division of the company though

John Bender said:
Read the OP again

Doesnt say it is the only thing they do. Microsoft also has an Xbox division but it does other things as well.

KyanMehwulfe · Feb 28, 2015

mejin said:
Maybe.

Playstation 4 has exclusives that might interest them: Dragon Quest Heroes, Yakuza, Disgaea, Toukiden, Persona 5, Bloodborn and more games developed by japanese developers. A whole set of games and support Microsoft does not have and there are more coming.

I'm not saying they are blockbusters but maybe they see it as worth it to have along side PC.

Actually quite a few of the guys I know all bought PS4s from Canada... or buy PS4s in Canada on sale... any time there's a Black Friday, Target liquidation, etc, they'll buy a one or two to take to China. Anecdotal and a small sample, but I've seen a lot more interest than PS3 or any other console...

That said, it's just a small percentage of them, and I've never actually seen anyone ever play a PS4 or a console... in China OR Canada even. And I have no idea what games they like. I've never even seem them buy any games. Last year we had some friends (other couples) from MBA over for a sort of triple date night, and they all just loved GTA V. But none of them ever remotely considered actually buying it. They rather just play card games/Candy Crush clones on their phones (girls) or card RPGs on their phones and MOBAs on PC (guys). GTA V was awesome but they saw it as a sort of one-time thing they had no interest actually paying for or spending more than an hour on. They still ask to play it sometimes if they visit but it's just a sort of curious thing to try... a sort of one-off. At home, they all basically just play LOL/DOTA 24/7. Sometimes some Chinese MMO that they waste thousands on... mostly just MOBAs though.

In general, no one I know really wants to pay for games, movies, or music... They can spend hundreds or even thousands on RMT DLC.... but in general, payment barrier to entry just doesn't really fly. General opinion in my experience is all content should be streamed and free, but ads should be used (heavily if needed) to cover expenses/break a profit.

Dazza · Feb 28, 2015

Lynn616 said:
Is Xbox One the only thing that the subsidiary company does? If not then it is impossible to know if it was caused by Xbox.

"$2.75 million with its Xbox One division"

Yes directly attributed to the Xbox One.

Uncle Rupee said:
"You're only losing $2.75M on the Xbox One? Why, that's a bargain!" - MS exec

LOL

Chobel · Feb 28, 2015

Lynn616 said:
Doesnt say it is the only thing they do. Microsoft also has an Xbox division but it does other things as well.

Xbox Division in MS does only Xbox stuff. I think you're mixing it up with "Devices and Studios Group" (which contains Xbox division plus other divisions such as Surface)

ZhugeEX · Feb 28, 2015

jep_uk said:
Did they ship the 5 mil though? Its not very clear, if they did, then thats 4.9 mil shipped sat there collecting dust.

Hahahahahahahahahahahahahahahaaaa

Oh man.

People need to read my post up the page.

Rymuth · Feb 28, 2015

Neuromancer said:
I guess only selling to 1% of the Chinese population wasn't good enough.

Lynn616 · Feb 28, 2015

Dazza said:
"$2.75 million with its Xbox One division"

Yes directly attributed to the Xbox One.

Chobel said:
Xbox Division in MS does only Xbox stuff.

No it doesnt. Also does Surface and few other things as well.

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