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Spoiling
the game for console makers - 4th June 2004
(Credit:
The Sydney Morning Herald)
Electronics salesman Min Shushan can talk for hours
about the merits of Sony's PlayStation 2 (PS2) versus
Microsoft's Xbox, having taken apart hundreds of consoles
over the years to rig them for pirated games.
Customers
at his glass-and-chrome specialty store in the heart
of old Beijing can buy consoles made at Sony or Microsoft's
factories in southern China and prep them to play
hundreds of copied games from Tomb Raider to Final
Fantasy.
"Any
title you want, we can get you," Min boasted,
riffling through a box of pirated game CDs wrapped
in plastic. "We have everything they've ever
made," he said, offering to sell any title for
the equivalent of 85 US cents.
"Don't
worry, the consoles are the real thing, 'factory direct'
so to speak," he added with a smile.
Min
said the consoles were obtained through "illegal
means" but were not stolen.
Resourceful
pirates have taken a big bite out of business for
Sony Corp, Microsoft Corp and Nintendo Co Ltd, whose
official games retail at between 200 yuan and 500
yuan ($A35-$A70) in China. Players say they wouldn't
even consider paying those prices.
Sony's
PS2 strategy in the country has got off to a rocky
start. It delayed the launch to January 1 from mid-December
and when it did go on sale in Shanghai and Guangzhou,
Sony only had one software title to accompany the
console.
The
number of official PS2 game titles for the Chinese
market has grown to six and Sony is looking to foster
relationships with local game developers, but this
has done little to boost sales.
An
official at Sony Online Entertainment (SOE), a business
that focuses on online computer games and is separate
from the company's PlayStation arm, Sony Computer
Entertainment (SCE), said the PS2 was not doing well
in China.
"It's
going to be a very tough road for the PlayStation
guys to enter China and actually build a business,"
John Needham, SOE's chief financial officer, told
a forum at E3, the game industry's annual trade show
held this May in Los Angeles.
Sony
Online knows all too well about the perils of the
Chinese market after its popular online role playing
game, EverQuest, failed to catch on with China's gamers,
because it did not cater to local tastes.
SCE
has not disclosed shipment figures for the Chinese
market, except to say it sent 4.28 million units to
Japan and the rest of Asia in the business year ended
March 31.
Another
factor holding back Sony's success in China, Western
industry watchers say, is the PS2's 1988 yuan ($A340)
price tag, which is about a quarter of the average
annual wage of an urban worker.
Chinese
analysts and players say PS2 has been doing well on
the black market for at least two years, thanks to
entrepreneurial pirates who have whittled down the
prices of individual games. Consoles sell for about
1500 yuan unofficially.
They
say China has no shortage of Little Emperors, or only
children, whose bourgeoisie parents are willing to
spoil them. Those who can't afford the system have
turned to internet-based games, which also face intense
competition from piracy.
Chen
Danian, chief operating officer at Shanda Interactive
Games, China's largest operator of online games, said
it had benefited from the PS2's lofty prices.
"The
scenario which occurs in the United States where the
PS2 is cheaper than the PC just doesn't work over
here," Danian said at the E3 forum, about the
Chinese gaming market.
Danian
said he believed the PS2 had officially sold between
200,000 and 300,000 units in China since its launch,
but two or three times that number through "unofficial
channels", such as Min's Happiness Game shop.
Microsoft,
which has not officially entered the Chinese market
with the Xbox, has said it is adopting a wait-and-see
approach. Its software sales have been massacred by
pirates who sell the newest versions of Microsoft
Office for six yuan.
"It
looks like a good opportunity for us, but we want
to make sure that when we do enter we do it with the
right regulatory process and have the right content,"
said Alan Bowman, Microsoft's Xbox general manager
for Asia-Pacific.
Businessmen
like Min say they are not worried about the entry
of the game giants: "Sure, they can sell their
official consoles here, but can they handle pirated
games? I don't think so!"
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