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This tech giant is stocking up on Chinese game consoles to compete with Sony

This tech giant is stocking up on Chinese game consoles to compete with Sony

Microsoft Corp stocks Chinese video game content to emulate it Sony Sources said that Group Corp.’s success with “Genshin Impact”, cemented China’s transition from a land of gamers only to a hub of great developers.

Sources said that the US software giant and Japan’s technology forefront have been giving huge funds to small developers for a few years to sponsor software and licensing titles, but the “Genshin Impact” effect has increased the sense of urgency.

The role-playing game from Shanghai startup miHoYo studio has generated billions of dollars since its launch two years ago, raising the bar for multiplayer and cross-platform gaming — sources said Microsoft and Sony are both pursuing their game in China. Pass and PlayStation Plus subscription services.

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Analysts said that the growing Western interest in Chinese games reflects the maturity of China’s game development industry. He said Chinese games are now on par with big-budget Western games Daniel AhmadSenior Analyst at Researcher Nico Partners.

“Chinese game developers are trying to standardize their development tools, build advanced production processes, and invest in really large-scale teams,” Ahmed He said. “Ultimately, it helps provide them with the competitive advantage of reaching a broad audience both geographically and platform-wise.”

Two industry sources said that Microsoft is building a team to explore Chinese games. The X-Box The maker has essentially filled its subscription slate with big-name titles, but now it’s attracting even independent studios with big-money shows, they said.

At the same time, filings show Microsoft is expanding its subscription service to PC and mobile devices, adding to the appeal of Chinese developers like miHoYo that have built a reputation for multiplayer compatibility, across platforms — with “Genshin Impact” a prime example.

One executive, whose studio signed a licensing deal with Microsoft three years ago to offer its game on Game Pass, said the US company recently offered a licensing deal several times larger for a sequel.

“We haven’t signed it yet because we think when we complete our game fully, you’ll get a better offer,” the executive said.

To illustrate the money involved, filings show that Microsoft paid $2.5 million to showcase the action game “ARK: Survival evolutionon Game Pass and $2.3 million for the ARK 2 add-on – both from American developer Studio Wildcard, which is owned by Chinese company Snail Games.

An executive at another developer, Shanghai-based Recreate Games, said his company signed a deal with Microsoft last year for its upcoming multiplayer title “Party Animals” to launch exclusively on Xbox.

“Xbox has approached several projects in China and these projects are primarily focused on PC and PC game development,” said the CEO. Luo Ziong.

Microsoft did not respond to email requests for comment.

We play zigita
Microsoft was slower than the mark in China compared to Sony. The Japanese company launched the “China Hero Project” game accelerator program in 2017 with the aim of helping Chinese developers publish games on PlayStation. It has supported 17 titles, seven of which have hit the market.

“We’ve been pretty quiet for the past two years. But the program still works great,” he said. Kuangyi ZhouThe former director of the China Hero project told Reuters in April. “We are proud of all the games that have successfully exited the program… There is no doubt that a new batch will come.”

In 2019, Sony partnered with miHoYo, a little-known studio developing “Genshin Impact”. The game – which became a worldwide hit when it was released a year later – is available for PC and mobile devices, but the console version is available exclusively on PlayStation.

Two people familiar with the matter said that Microsoft regretted losing Genshin Impact. I spoke to miHoYo early in the game’s development but did not reach an agreement, one of them said. The other person said that experience is the driving force behind Microsoft’s more active pursuit of Chinese developers.

“Picking up ‘Genshin Impact’ made Sony big money,” said the second person, who declined to be identified because the information was not publicly available.

There’s no public data on console revenue from “Genshin Impact,” but data from Sensor Tower put the figure at $3 billion for mobile devices as of May.

Market evolution
For much of the 21st century, imported titles were mostly played by Chinese gamers as local games were seen as less valuable to produce. Even the Chinese game company Tencent Holdings Ltd has begun publishing foreign games at home.

As the market has grown to become the largest in the world, local studios have invested more and more in developing better quality games. The trend accelerated with regulatory restrictions on new games and restrictions on the number of imports, and benefited from the return of engineers who worked for top-tier studios such as Ubisoft Entertainment SA and Activision Blizzard Inc.

Gaming executives now refer to “Genshin Impact” as a global industry milestone, praising its production value and smooth cross-platform gameplay. Even Apple used the game to prove the power of its premium devices including the new iPad Air which is equipped with the latest M1 processor chip.

Another highlight is 2021’s “Naraka: Bladepoint” from NetEase Inc, the second largest game company in China. While most Chinese games are free to play and profit from in-game sales, “Naraka: Bladepoint” has sold more than 10 million copies despite its $20 price tag, reflecting confidence in its production value.

Two sources told Reuters the game had attracted the attention of both Microsoft and Sony. Someone said that NetEase prioritized Microsoft making the game a Game Pass exclusive in June.

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