Chinese high-tech companies like Alibaba Group Holding Ltd., Xiaomi Inc. and Huawei Technologies Co. Ltd. have transformed many industries worldwide in recent years.
However, the game console sector has been little affected, as Microsoft Inc. and Sony Corp. have dominated the market.
That might change quite soon.
Chinese gaming startup Fuze recently launched a home video game console called the Tomahawk F1.
The console is said to be superior to Sony’s PlayStation 4 and Microsoft’s Xbox One — at just a third of the price.
Fuze held a news conference in Beijing last week to unveil the “first” Chinese console, which is scheduled for delivery from June 1.
However, the console looks like a combined knock-off of the Xbox and the PlayStation.
The controller for the Tomahawk F1 resembles that of the Xbox One, and the console’s design is quite similar to that of the PlayStation 4.
The F1 has an Android-based operating system, and the software of the console is as good as its competitors’.
Moreover, the console supports virtual reality, and Fuze will release a VR headset later.
By contrast, the latest models of the Xbox and the PlayStation were launched in 2013, and neither of them fully supports VR.
Honestly speaking, what games are available is the key, rather than the look or technical specifications of the unit.
I’ve seen several top-performing game consoles, including the Nintendo 64, the Sega Dreamcast or the 3DO Interactive Multiplayer.
They all have some of the best hardware but are also-rans because of the lack of popular games.
Over the last decade, several companies have tried to enter the home video game console industry and compete with Microsoft and Sony.
But game developers have shown little interest in welcoming any newcomers, since they need to spend a lot to develop games for a new system.
However, Fuze, a company that was established two years ago, has already won support from several big global game developers, including Koei Co. Ltd., Ubisoft Entertainment SA and Deep Silver.
They will develop many popular games for Fuze, like Dynasty Warriors, Assassin’s Creed, and BlazBlue.
Also, the legendary leaders of these developers showed up at Fuze’s news conference.
Game companies are having a hard time in the Chinese market.
The government has lifted the ban on imported game consoles, but it continues to scrutinize them carefully and levy expensive taxes on them.
The prices of Xbox and PlayStation in the mainland are double those in Hong Kong.
Also, customers have very limited choices in games.
So, developers are keen to team up with Fuze to tap into the world’s most populous market.
The F1 is priced at just 899 yuan (US$138). But the console offers a user experience and functions that are similar to those of its competitors.
Some industry insiders believe the console will become sought-after because it offers good value for money, just like Xiaomi’s mobile phones do.
The company might beat foreign brands in the domestic market at first and then expand overseas and transform the whole industry.
However, the game console industry has shown sign of fading as online games increasingly gain popularity.
Many gamers would rather play games on their mobile phone or iPad than spend extra money on a game console.
Global home video game console sales have been falling year after year, from more than 80 million units in 2008 to 45 million last year.
And it’s estimated that the mobile gaming market is likely to overtake the game console market in size either this year or next year.
That reminds me of the problem faced by Lenovo Group Ltd. when it moved into personal computers by taking over IBM’s PC business in 2005.
After it became a top player in the industry, Lenovo quickly realized that the market was contracting.
Today, Microsoft and Sony are also faced with the problem of increasing competition from mobile games.
This article appeared in the Hong Kong Economic Journal on May 16.
Translation by Julie Zhu
[Chinese version 中文版]
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