Nearly two years after ban lifted, China’s game console market is still negligible

I don’t want to say I told you so, but…I told you so. Twice.

(OK, maybe I do want to say I told you so.)

It’s now been nearly two years since Microsoft launched the Xbox One in China. It was the first foreign console to be legally available in the Middle Kingdom after a nearly decade-long ban, and it got off to a promising start, selling 100,000 units on launch day.

Microsoft set its hopes on selling a million in the console’s first year, but things didn’t work out that way. Lackluster consumer interest, broken promises, and censorship led to financial losses and a price drop. This year, China’s Xbox gamers got even more disappointing news. It’s not hard to see why the console might be selling poorly.

And all signs do point to the console selling poorly. Microsoft hasn’t publicized sales numbers, but Tmall and Taobao’s public sales figures suggest that Microsoft is probably selling around 1,000 units per month through Alibaba’s platforms. (For comparison, Tmall alone has sold over 100,000 iPhones in the past month). JD.com doesn’t publicize recent sales figures, but comparing review numbers between Tmall and JD suggests that Microsoft’s sales may be slightly better on JD, but only slightly.

I doubt either company is breaking even 20,000 a month in unit sales.

The strongest evidence that China isn’t an important market for Microsoft: the company has just announced the launch countries for its slightly-upgraded Xbox One S model, which is coming next month. China is not among the 25 countries listed.

Granted, doing a day-one China launch for electronics can be difficult because of China’s regulatory requirements. But when China becomes an important market, companies often go through the trouble. As China became an increasingly important market for Apple, for example, the company began regularly including China in its day-one launch lineup. The fact that Microsoft hasn’t may be telling.

Based on public ecommerce sales figures, Sony’s Playstation is faring slightly better, but still probably isn’t living up to Sony’s hopes. On Tmall, for example, the console is selling fewer than 2,000 units a month.

All in all, I doubt either company is breaking even 20,000 a month in unit sales, and I wouldn’t be shocked to learn the real number was quite a bit lower. That’s not great for a market with over 500 million gamers who are, at least in theory, your target customers.