Microsoft is preparing to launch the Xbox One in China this September to help increase sales of the console. The company is hoping to tap into a market of over 500 million gamers, which could push the Xbox One ahead of the PlayStation 4. However, with a rumored price-tag of $800, how does Microsoft plan to make this a reality.
According to a report from Kotaku, a Chinese electronics website that goes by the name, Zol.com, has posted an image of the Xbox One with a price tag of 4999 RMB, which is around $800. That's a huge price point when compared to the $499 price tag in the United States for the Kinect version, and $399 for the version without Kinect.
It shouldn't come as a surprise, as products tend to be more expensive in China compared to the States. We understand the iPhone 5S has a higher price tag in China, yet Apple still manages to ship a few million handsets. This means a console that costs $800 should fare OK, especially since Microsoft has partnered with BestTV to launch the device in the country.
The surprise comes into play when consumers realize that several parts of the Xbox One are created in China, so why the "rob the bank" price tag? Well, the Chinese have something called Value Added Tax, and it is part of every product sold in the country. China's VAT tax is around 17 percent, and this usually makes a product 27 percent more expensive in the country when compared to others.
Scary situation for Chinese consumers, but they should be used to this by now.
The big question, however, is whether or not the Xbox One can carve a market for itself behind inside the great wall. When we consider how much Chinese gamers prefer to play PC games and MMOs, we find it very difficult that the Xbox One would turn out to be a massive success in the country. Not to mention the restrictions on the type of content developers can create for Chinese gamers.
If gamers in China want to play the likes of Call of Duty or Grand Theft Auto, they will have to import these titles.
At the end of the day, we expect the Xbox One to have a decent launch, but after that, the going will be tough.