Microsoft’s gaming push in Asia and China will be a huge struggle given its competitor’s head start. Here are a few ways it can tackle the issue
Microsoft will be launching its magnum opus console Xbox One in Singapore, China and parts of Asia this September. While it has its reasons not to release it on the same day as Western and a few Pan-Asia countries on November 2013 (long story short: it’s a US-centric company), that doesn’t change the fact that Sony Computer Entertainment got its hands on the Asian market with its next-gen darling, the PlayStation 4, before 2013 ended.
It’s not going to be easy for Microsoft to penetrate those regions, more so in China. Game developer American McGee (who did the two dark fantasy Alice games and runs Spicy Horse Studios in Shanghai) said that the console will fail in that country. Furthermore, Chinese news site QQ said that the company will only ship 100,000 units to the region.
However, with a few alternate methods and not sticking to its Western model of selling games, it can at least make a dent in the Asia-Pacific market.
Taking the free-to-play road
The free-to-play model is dominant in Asia, no bones about it. While there is a place for retail gaming, it seems that the payment model will be sliding down the aforementioned path in a decade or so.
A few days ago, I played a game called Smash Hit on the iOS. While you can play the game for free in its endless-running state, paying a one-time sum lets you unlock more features to the game to make it whole. You can argue that it’s an overly generous demo, but free-to-play games can be completed without any monetary investment if one is given lots of time and patience.
Microsoft already tried out a similar tactic with an Xbox One fighting game called Killer Instinct. Following League of Legends, the free version rotates a new character from the roster available for online and offline play each month. The option to just buy single few characters or different packages featuring the whole game package (US$19.99 to US$39.99) is available at a player’s convenience.
Why not take it a step further and implement it in an exclusive Xbox title like the Forza Motorsports or Gears of War brand, to a point? For the former title, make a select few cars and tracks available on a weekly rotation basis, with the option to pay for particular modes of the game at a set price, or all of it for a typical retail price. For the latter, opt to follow what PC game Loadout did, but with the added bonus of a set retail price for most of the game.
The important takeaway to all this is that developers and publishers need to find out which parts of their current and upcoming triple-A games should be offered free. At the same time, they should figure out which of the game’s substantial options are worth paying for in increments; the option to just pay the game in full retail should obviously be there. In other words, the company will need to borrow a few tactics and design philosophies from mobile gaming giants like King and Gumi, and implement it on their own core titles.
Being BFFs with local IPTV/cable companies
Apart from being a console that plays games, the Microsoft Xbox US and Asia team stated during a Singapore press briefing a few days ago that the Xbox One also serves as an output device for other media boxes. Yes, you’re able to plug in a Wii U/PS4 through it as a makeshift switcher, but it’s meant to be used alongside media boxes that host cable TV and streaming channels.
Following its partnership with China’s biggest IPTV service provider BesTV, the company can follow up with doing tie-ins and joint ventures with other Asian TV and cable providers like StarHub in Singapore or PCCW Media in Hong Kong. Microsoft has always been using the Xbox dashboard as a means to get its local entertainment sources across to users; it needs to continue using local entertainment relevant to the audience in the region. Smartphones do stream TV shows and internet programming, but it’s not the same as watching it on a big screen in a comfortable living room space.
Microsoft announced its Xbox Originals TV programming plans where renowned American film and TV production houses and directors create shows exclusive for the Xbox One. Assuming the plan shows a bustling reception, Microsoft should not limit itself to Western productions. It should take the initiative to tap into Hong Kong, Taiwan and Chinese studios and production houses to create exclusive shows for the machine. Kung-fu films, period pieces, anything with fast cars: whatever that can work on an international scale will work in Asian countries.
It may sound ludicrous at first, but if given enough thought and effort, having a short film featuring Stephen Chow or Donnie Yen that’s exclusive to Microsoft’s programming can work wonders on a regional, and perhaps even international scale. Microsoft’s partnership with BesTV should be more than just a means for the American company to set foot in China soil; it needs to tap into its partner’s local knowledge and experience to work its entertainment content to the country’s needs and wants.
Price drop or value-for-price marketing?
Here’s the part that can be a stickler: the price point of the console. While the PlayStation 4 costs US$399 in US, it costs significantly more in some Asian territories. Singapore’s PS4s cost S$639 (US$510), while Malaysia’s PS4s cost S$700 (US$559); rumour has it that the price jack is due to store shelf rental costs for various outlets in the respective regions. The Xbox One in the US costs a hundred extra: US$499. If you factor in the aforementioned rent and possibly other costs, the price for an Xbox One in Asia is not going to stay within the US$499 mark.
That’s a potential deal breaker for many gamers and even for people slightly interested at the console. It needs to undercut or be comparable with Sony’s PS4. It cannot be on its US$100-extra high horse. Microsoft can opt to launch a “trimmed-down” version of its Xbox One just for Asian regions for the sake of keeping costs down, like how the company did with its Xbox 360 Arcade edition.
Of course, the fact that most games on the Xbox One platform need some form of mandatory install is a huge issue. Perhaps a smaller hard drive for the device can work, or even a method to forgo most of its entertainment apps on its dashboard to cut cost.
If all else fails, it’ll need more manageable in-house incentives to make the higher-than-US$499 price justifiable. Retailers can toss in a free Xbox One game or two, along with a free 12-month Xbox Live Gold subscription to make the expensive pot look sweet. If it needs to play on the TV entertainment route, a free full-year subscription to a partner cable or IPTV provider can help people lighten a customer’s wallet a little easily. Free 24/7 warranty services from major regional outlets like Best Denki or Challenger help too. While people love a sure fire cheap deal, they equally cherish a deal that gives more value than its fixed sum.
As an aside, I do hope that the report about the machine costing US$820 in China (via Game.163.com) is just a slight error or some form of miscommunication. Otherwise, Microsoft will be digging an early grave, at least in the region.
Keep in mind that these aren’t foolproof plans for success; the games industry is an erratic beast after all. Though the fight in Southeast Asia is slightly easier, China already has a boatload of issues with console gaming despite its console ban being lifted (censorship rules, console piracy, etc.). Microsoft needs to start embracing alternate pricing, marketing and distribution strategies commonplace to at least make itself relevant in Asia.