Alibaba getting into game consoles is a terrible, terrible idea

Recently, you may have seen the reports that Alibaba, China’s top ecommerce king, is interested in getting into the game console business. According to a VentureBeat report, rumors from what that site considers a reliable source suggest that Alibaba wants to make a video game console for the Chinese market.

I have no idea whether or not these rumors are true. Alibaba has shown signs of getting into gaming, but China’s tech media has been pretty quiet on whether there might be a game console in the works. Whether this is actually happening is anyone’s guess, but I can tell you this with some confidence: Alibaba getting into making game consoles is a really bad idea.

Alibaba is not a game company or a hardware company

First of all, Alibaba has no real history of success with games or the gaming market. Sure, it has made small pushes and investments here and there, and it has been inching closer over the past few years. But Alibaba is not a brand that China’s gamers associate with any facet of their hobby – not mobile gaming, not PC gaming, and not console gaming. Alibaba has never produced a hit game. It does not operated any particularly popular gaming platforms. It certainly has never produced a viable piece of gaming hardware.

In fact, Alibaba doesn’t have much history of success with hardware at all. Its strongest push into the hardware market has been via partnered phones that use its YunOS mobile operating system and branding. But according to the sales figures on the official YunOS store, none of those are selling very well.

See: Can Alibaba compete with Tencent when it comes to games?

There may not even be a game console market

Yes, video game consoles have been banned in China for the past decade and now they’re not. But assuming that’s going to lead to a blossoming new market in video game consoles is silly. Consoles may not have been legal in China until recently, but they’ve been widely, easily available via the gray market for years. During the console ban, a gamer could walk into any electronics mall in a Chinese city and pick up an Xbox or Playstation for only slightly more than what they cost outside China, and because the consoles were often hacked, games were virtually free. Despite the widespread availability of consoles and very cheap games, though, game consoles didn’t catch on at all. China’s gaming market continued to be dominated by the PC.

Since the ban has lifted, Microsoft has released its Xbox One in China, betting that Chinese consumers will plunk down cash for a console that offers localized games and online services. So far, that appears to have been a poor bet. The console sold just 100,000 units (including preorders) at launch, and Microsoft has been tight-lipped about sales figures since then, so they’re probably not improving. Sony’s console won’t be released in China until next year, but the prospects for that aren’t looking great either.

If things look grim for Sony and Microsoft, they’ll be ten times worse for Alibaba. Sony and Microsoft have well-established gaming brands to draw on in their China marketing, and they’ve got back-catalogues of hit games and successful IP that they can try to bring to bear. Alibaba has none of that. I’ve criticized the launch lineups of both the Xbox One and the PS4 as being weak, but at least they include games people have heard of before. I’m genuinely not even sure what games an Alibaba console could launch with.

Microconsole? No one cares.

It’s possible that Alibaba could be aiming smaller, intending to produce something more like the Ouya than the Xbox One or the PS4. But the argument against that is virtually the same. Other Chinese companies like Huawei – which has way more hardware know-how than Alibaba – have already tried mobile-focused microconsoles, and none of them has exactly set the market on fire.