Sony has announced it will be taking its new PlayStation 4 console to the Chinese market in a joint venture with Shanghai Oriental Pearl Group.
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According to Reuters, the two will form a partnership to sell and market the console in China, which is not traditionally an easy market for major manufacturers to penetrate. Third-party knockoffs and piracy dominate the region, and the government itself only lifted the 14-year ban on foreign game consoles in January.
Despite these obstacles that Sony (and Microsoft, who is also launching the Xbox One in the region) must overcome, the huge potential audience makes the endeavor worthwhile. Even gaining a foothold in a small percentage of China's massive population could represent a significant financial gain for either company, as well as a foundation on which to grow a larger audience in the future.
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The partnership between Sony and Shanghai Oriental Pearl will actually consist of two joint venture. One will be aimed at the manufacturing and distribution of the hardware, while the other will look after the software.
According to Reuters, one venture will have registered capital of 10 million yuan ($1.60 million), and will be 51 percent owned by SOP, with the other 49 controlled by Sony. The other will have funding of 43.8 million yuan, to be 30 percent owned by Shanghai Oriental Pearl Culture Development and 70 percent owned by Sony. Microsoft is using a similar venture partnership strategy for launching in China, and it will be interesting to see how their consoles do in the tough market.
