TCL to release its first video game console

Chinese television maker TCL Corp is releasing its first video game console similar to Microsoft Corp's Xbox later this year, a company executive said amid high expectations for the long-closed sector.

"Entertainment will be the biggest focus for us in 2014," said Hao Yi, president of TCL Multimedia Technology Holdings Ltd, a major subsidiary of TCL.

Increasing demand for video games from Chinese youngsters will drive the sales of the company's new gadgets, according to Hao.

TCL Corp's display at the Consumer Electronics show in Las Vegas. The Guangdong-based company said it will release a console similar to Microsoft's Xbox later this year. Yan Lei / Xinhua

Although the Guangdong-based maker did not disclose the possible release date of the terminals nor sales forecast, its stocks surged in Hong Kong on Monday.

The company was eager to find a new business model after the government stopped subsidizing the household appliances market in mid-2013.

TCL hopes its new gaming consoles will help the company tap into a lucrative market that has been closed by regulators for more than a decade.

It was not until this January that the government lifted the ban on the sector and video game consoles were allowed to be officially sold on the Chinese mainland.

Overseas manufacturers, including Sony Corp, Microsoft and Nintendo Co, are believed the biggest beneficiaries of the new policy.

Sony's PlayStation series and Microsoft's Xbox are among the most popular consoles worldwide.

Last September, Microsoft formed a $237 million joint venture with Shanghai-based BesTV New Media Co to bring the United States company's gaming business to China.

Local vendors are also eager to get a fair share from the looming market.

Shenzhen, Guangdong-based Huawei Technologies Co Ltd said it will introduce an Android gaming console to the Chinese market in the second quarter of the year.

The retail price for the product could be around $200 - a reasonable price tag for Chinese buyers, according Scott Sykes a spokesman for Huawei.

TCL is likely to join up with a local console maker in developing its new products, according to reports from news site qq.com.

TCL did not answer calls for comment made by China Daily.

China's booming video game industry is especially attractive to console makers, analysts said.

Games running on personal computers, smartphones and arcade games are dominating the nation's market currently.

"The turnover of China's online gaming market stood at 89 billion yuan ($15 billion) in 2013, powered by a robust increase in the mobile gaming sector," said Yan Huawen, an analyst from Beijing-based iResearch Consulting Group.

PC games will remain the largest contributor over the next few years although they will lose ground to mobile games, according to Yan.

"PC games will generate more than 60 percent of the industry turnover this year and about half by 2017."

Yet how big the game console market will be in China is still uncertain because lighter and easy-to-play mobile games are the trend and diehards of sophisticated console games were able to purchase smuggled terminals long before the ban was lifted, industry insiders said.

"After smart TVs and set top boxes, game consoles will be the third power that alters the way Chinese people use their living rooms," said Xin Haiguang, an independent industry researcher.

But he also argued local vendors may have missed a big profit opportunity because of the 13-year ban.

"Chinese companies were only used as console assemblers. Overseas companies have gained huge earnings out of the business," said Xin.

gaoyuan@chinadaily.com.cn