A video game console seller in Beijing.
Microsoft's Xbox One is poised to be the first foreign game console to debut in China, but as the local pricing was announced on Wednesday -- $200 more than in the U.S. -- would-be customers made their displeasure known online.
The Chinese-edition Xbox One will retail for 3699 yuan ($600), when bought without the Kinect sensor. The response? "I can't afford this price", "Bye bye Xbox" and "I'll buy a PS4" were among some of the comments Chinese Internet users posted online.
It's not the best start for the product's debut in China, after the government lifted a 14-year-old ban on foreign game consoles. But despite the high price, there are still signs that the Xbox One will sell well, according to local sellers and experts.
One reason for the high price is China's 17 percent value-added tax on imported goods, Microsoft explained in an email. But the company will also be offering cheaper games, with the costs ranging from 99 yuan (US$16) to 249 yuan per title.
In addition, the company is including "hundreds of thousands of hours" of entertainment content by bringing hit movies, TV programs and other locally developed applications to the system. "We're confident gamers will respond well to this launch," Microsoft added.
The Xbox One hasn't sold well in Beijing on the gray market, according to dealers in the city, who make a business of buying video game consoles from other regions to sell in China. During the country's video game console ban, the sellers provided a convenient way to purchase the systems.
One dealer, surnamed Qiu, has been selling consoles for several years. Boxes for the older Xbox 360 system, along with the PlayStation 3 and 4, are prominently shown at his shop. But the Xbox One hasn't done so well, even with a gray-market price tag of around 3100 yuan.
"A lot of the shops here sometimes can't even sell one unit in a month," Qiu said. The system is still too expensive, when compared to the PlayStation 4, which prices for 2700 yuan on the gray market. The Xbox One also has too few games, he added.
And until Sept. 23 when Microsoft officially brings the Xbox One to mainland China and Hong Kong, there is no Chinese language model available yet, dealers said. In contrast, Sony released a Hong Kong version of its PlayStation 4 last year that Beijing gamers are buying.
That official release will give the console a boost.
"It's a little more expensive, but people will buy it," Qiu said. "It means they'll get a warranty. Even though its more expensive, consumers will feel better knowing they bought the official product."
It also helps that Microsoft is offering pre-orders for the Xbox One through JD.com, one of the country's largest online retailers. Chinese gamer Wang Jielin predicted the Xbox One will sell very well, because Microsoft can readily make it available across the country.
"The Chinese version will largely be perfectly localized for consumers, so this should appeal to many gamers," he said. "Even casual gamers will look forward to it."
Wang, however, doesn't plan on buying the mainland China edition Xbox One, but one from Hong Kong. He's worried that the Chinese government will restrict games rated for those 18 and older from being played on the local console.
It's unclear if the mainland China edition Xbox One will let users play titles from other regions. But games offered domestically must be submitted to Chinese regulators for approval, which could mean that more violent titles are banned or toned down in some way.
Xue Yongfeng, an analyst with Beijing-based Analysys International, said even though the Xbox One's price in China is high, it will still be attractive to its core audience of hardcore gamers.
Beijing's gray market video game dealers are hoping their businesses will remain lucrative, despite Microsoft's entrance in the market. "If Microsoft is forced to put a lot of restrictions on the games, then sales will be weaker," said one dealer, who didn't wish to be named. "We'll have to wait and see if Microsoft can put out a good product."
Sony is also planning on launching its PlayStation 4 in China, but has yet to announce a release date.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.