Sony to Sell PlayStations First Time in China, Thanks to Free-Trade Zone in Shanghai

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By Sounak Mukhopadhyay | May 27, 2014 11:26 AM EST

China imposed a ban on video game consoles for 14 years. However, Shanghai started a free-trade zone (FTZ) in September 2013, and the ban was lifted in January. Sony apparently does not want to waste any more time to cash in the opportunity. The electronics giant is all set to make and sell PlayStations for the very first time in China.

REUTERS/Toru Hanai
A man tries out Nintendo Co Ltd's 3DS portable game console near an advertisement for Sony's PlayStation 4 game console at an electronics retail store in Tokyo May 7, 2014. Japan's Nintendo Co Ltd on Wednesday said it expects to return to profit in the current business year after three straight years of losses, helped by a series of new video games for its Wii U console.

State-owned Shanghai Oriental Pearl and Sony signed a deal which will allow the Japanese company to start business in the country. There was a filing made with the Shanghai Stock Exchange on Monday, May 26. Both the organisations, under the deal, will form two joint venture firms in the free-trade zone in Shanghai, according to Sky News. Sony is going to have a 49 per cent stake in one company, whereas it will have a 70 per cent share in the other.

The deal is expected to open up a market with around 500 million players to foreign companies like Nintendo, Microsoft and Sony. Sony's PlayStation 4 has a "record demand" since its launch in the latter part of 2013. The sales are estimated to have topped seven million units all over the world in April. Business Standard reported that the opening of the Chinese market could work so well for Sony that it would be able to compensate losses it had suffered for years.

Sony's Chief Executive Kazuo Hirai said in Tokyo that the size of the Chinese market was significant. "The Chinese market, just given the size of it, is obviously potentially a very large market for videogame products," Hirai said, "I think that we will be able to replicate the kind of success we have had with PS4 in other parts of the world." He also said, "Initially, we will start with non-Chinese games, that's fine because that's all we have. But it's about getting involved in the local content creation market, which I think is very important for real success in the Chinese market."

The news of the deal, however, was not enough to boost the stock potential of Oriental Pearl as it closed down 0.54 per cent on Monday, May 26.

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(Photo: REUTERS/Toru Hanai / )
A man tries out Nintendo Co Ltd's 3DS portable game console near an advertisement for Sony's PlayStation 4 game console at an electronics retail store in Tokyo May 7, 2014. Japan's Nintendo Co Ltd on Wednesday said it expects to return to profit in the current business year after three straight years of losses, helped by a series of new video games for its Wii U console.
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