Sony Plans to Start China Console Packaging by December

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Sony Games Consoles
Visitors play on Sony Playstation 4 video games consoles, produced by Sony Corp. Photographer: Chris Ratcliffe/Bloomberg

Sony Corp. plans to start packaging new video game consoles for the China market from December as it seeks to win sales in the world’s most populous nation after the end of a 14-year ban on the machines.

Sony’s venture for China intends to package 200,000 consoles annually, according to a filing on the website of the China (Shanghai) Pilot Free Trade Zone. Masaki Tsukakoshi, a Tokyo-based spokesman for Sony Computer Entertainment Inc., confirmed the document’s authenticity and said actual production amounts may differ.

Gaming is one of the few bright spots for Sony, which is headed for its sixth annual loss in seven years despite selling more than 10 million units of its PlayStation 4 console. Microsoft Corp. has already started selling its Xbox One in China, with a limited range of titles because of government restrictions.

“There’s an opportunity” in China, said Atul Goyal, a Singapore-based analyst at Jefferies Group LLC. “But it remains to be seen if the upside is large or small.”

Sony said it agreed to form two ventures with Shanghai Oriental Pearl Group Co. to start making and selling consoles after China lifted its ban, according to a filing by the China partner in May. Sony will have a 70 percent stake in one venture for hardware production and 49 percent in the other, for software sales and networks.

“We have not disclosed the launch date in China yet,” Sony’s Tsukakoshi said.

Microsoft’s Xbox

Sony fell 1.7 percent to 1,882.5 yen at the close of trade in Tokyo trading, paring a 3.1 percent gain this year.

The filing was made in July and posted on the free trade zone website in August. It was approved by China’s State Environmental Protection Administration, according to the website, which didn’t disclose an approval date.

Microsoft began selling its Xbox One on last month in 4,000 stores, beating Nintendo Co. and Sony to become the first big player offering a console in China.

“Console gaming is very, very expensive, both on the hardware and software side,” said Serkan Toto, the Tokyo-based founder of consultant Kantan Games Inc. “Most Chinese console gamers that can afford it already have a console.”

Last month, Tokyo-based Sony said it would report a wider full-year loss of 230 billion yen ($2.1 billion) as it writes down the value of its faltering smartphone business.

The 180 billion-yen charge limits options for Chief Executive Officer Kazuo Hirai, who has been working to revive Sony by emphasizing entertainment, consoles and mobile devices as demand for TVs and cameras declines.

Sony plans to boost cloud-based gaming by creating a mass-market streaming service similar to Netflix Inc. The PlayStation Network has more than 50 million active users and its PlayStation Now service is available in North America for streaming content on Sony devices including Bravia TVs.

(An earlier version of this story was corrected because it misstated the gender of Sony’s spokesman.)

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