ZTE Joins The9 to Make Chinese Game Console for Release in March

ZTE Corp. (000063), China’s second-biggest maker of phone-network equipment, formed a venture with online game developer The9 Ltd. (NCTY) to make a gaming console after the nation lifted a 14-year-ban on the devices.

ZTE9 Network Technology (Wuxi) Co. plans to release the Fun Box console this month, Qin Yina, a spokeswoman for Shenzhen-based ZTE said in an e-mailed response to questions today. The Fun Box, powered by Nvidia Corp. (NVDA)’s Tegra 4 chip, will only be sold in China, Qin said.

The venture faces competition from makers including Microsoft Corp. (MSFT) in a video games market that consultant PricewaterhouseCoopers LLC estimates is the world’s third largest. In January, the government lifted the ban, intended to limit the effects of video games on young people, in the new Shanghai free-trade zone.

The cube-shaped ZTE9 Fun Box comes with 2 gigabytes of RAM, USB and micro-USB ports, dual antenna Wi-Fi and Bluetooth-enabled game controllers, Qin said in the e-mail. Users can stream high-definition online videos through the box, in addition to video from connected USB devices, she said.

The venture is in talks with developers in China and overseas regarding titles for the console, Qin said.

Microsoft and BesTV New Media Co., a subsidiary of Shanghai Media Group, in September said they formed a $79 million gaming venture to take advantage of the new rules permitting consoles. Microsoft didn’t say whether the venture would offer its Xbox console or a new device. The business will deliver a new generation of innovative family entertainment, the Redmond, Washington-based company has said.

Video games in China will generate about $10 billion in 2015 revenue, according to data on the PricewaterhouseCoopers website. The nation may overtake Japan to become the second-largest behind the U.S. by 2017, it said.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Dave McCombs, Suresh Seshadri

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