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Why American McGee thinks the Xbox One will fail in China

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Veteran game developer American McGee believes the Xbox One will fail when it launches in China due to preferential and cultural differences between the country's market and the West, as well as tight restrictions on content, according to a post on his Facebook page.

McGee — the creative force behind the Alice dark fantasy series as well as episodic title Grimm and hack-and-slash game Akaneiro: Demon Hunters — currently lives in Shanghai, where he serves as the head of Spicy Horse Studios. In his post, McGee said Microsoft's decision to bring the Xbox One to China this September, a move that was announced earlier this week, will "cost them dearly." Part of this is due to the fact that the Xbox One and Sony's PlayStation 4, as well as previous console generations, are already available in the region through online retailers like Taobao.

Additionally, one of the Xbox One's major selling points is its functionality as a set-top cable box — a piece of hardware the Chinese market is already saturated with. Local Chinese companies are offering boxes cheaper than the $499 Xbox One, and most streaming content is already being viewed via PCs and mobile devices. This, in addition to piracy, could hinder Microsoft's success in the territory.

"Piracy. If you've not seen it in China, you've not seen anything," McGee wrote. "It's massive, awe-inspiring, and will poke giant holes in even the best digital content plans."

Furthermore, McGee states there is a cultural disconnect between Western and Chinese audiences, noting that Microsoft's target audience — families in the middle-class and higher with children — doesn't have time to play games because of rigorous school and work commitments. The region's restrictions on content could also get in the way of many software releases.

"Any console shipped out of the Shanghai [free trade zone] will be unable to play any games other than those approved by the Ministry of Culture (and other media oversight bureaus)," McGee said. "That means content for the device will be limited and inferior to what could be had by purchasing a black-market console on Taobao. Chinese consumers are wise to hardware/software restrictions and prefer to purchase 'rooted' devices whenever such restrictions are put in place."

Last month, Chinese network equipment maker ZTE Corp and game developer The9 Ltd. announced they were collaborating on China's first natively-made gaming console, the Fun Box.