Sony Corp of Japan and Shanghai Oriental Pearl Group Co Ltd will form two companies in partnerships with a view to manufacturing and marketing PlayStation in Chinese market, Shanghai Pearl stated in an exchange filing on Monday.
One of the joint businesses will focus on production of physical components the games console while the other will develop software, the company’s Shanghai Stock Exchange filing stated.
The partnership, which will operate from Shanghai’s free trade zone, will be created by a Shanghai Oriental Pearl subsidiary and by Sony’s China unit, Reuters reported.
Yet, games consoles, which were outlawed in China from 2000 to last January, are likely to have a hard time navigating through the Chinese market. The Chinese gaming scene is marred with piracy and console-smuggling on top of the fact it’s very different from conventional markets in Japan, US and Europe, with most gamers in China being accustomed to PC and mobile games.
Additionally, Chinese game developers employ a marketing design through which customers can play games for free and purchase in-game upgrades such as extra lives and advanced weapons. Mainstream game console makers do business by selling the consoles and games themselves.
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A spokesman of Sony Computer Entertainment Inc told Reuters that Sony and Shanghai Oriental Pearl are creating the joint businesses to leverage on the halting of the ban on game consoles in the Shanghai’s free trade zone.
One of the partnerships will register a capital of 10 million yuan or $1.60 million. Sony’s China unit will own 51% stake in the firm with the remaining 49% being held by Shanghai Oriental Pearl Culture Development Co.
The other venture will have a registered capital of 43.8 million yuan. Shanghai Oriental Pearl Culture Development Co will own 30% of the stock and Sony (China) 70%.
According to Bloomberg, Microsoft Corp has already declared intentions to sell Xbox One game console in China.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
