Sony (Sony Corp Ord/SNE) has signed two joint ventures with Shanghai Oriental Pearl that would allow the companies to manufacture and market PlayStation consoles.
Sony will receive 70 percent share and Shanghai Oriental Pearl will have 49 percent stake and the ventures will be set up in Shanghai’s free trade zone. According to the documents files with the Shanghai Stock Exchange, one venture will manufacture hardware while the other venture will develop software. The Chinese government had started allowing foreign console makers to sell consoles in the country from January after the consoles were banned in 2000.
“The joint venture will be based on the relevant state policies and will introduce quality and healthy video games that will adhere to China’s national conditions as well as the tastes of Chinese gamers,” said an Executive from Shanghai Oriental Pearl.
Sony will have to face challenge of establishing PlayStation in China as the domestic players prefer gaming on PC’s and on mobiles and adhering to the government’s policies. Sony’s rival Microsoft had also recently got into a partnership with BesTV New Media, a subsidiary of Shanghai Media Group to launch the company’s consoles. China;s gaming market is set to generate about $10 billion in sales next year, according to industry research PriceWaterHouseCoopers.
However Sony has not mentioned which of the PlayStation consoles will be launched into the market. The Chinese market will also have fewer games as the console might not be compatible with game titles released in foreign countries. There is also a possibility of Sony developing a custom console similar to Nintendo’s customization of Wii U.
Fourteen years ago, China banned the foreign gaming consoles in 2000, following concerns about potential harm to the physical and mental development of children. But in early-January 2014, China’s State Council had lifted the ban on the sale of foreign gaming consoles, which made the companies to plan aggressively to launch the device in China’s markets.
Gaming industry in the country has seen tremendous growth in the last year, where it had generated over $13 billion in 2013, up 38 percent from 2012.
[ Source (PDF file in Chinese) ]