Lenovo Planning to Sell Video-Game Console in China by End of This Year

[BizioEE]

[size=+1]Lenovo Planning to Sell Video-Game Console in China by End of This Year[/size]

Lenovo Group Ltd., China’s biggest maker of personal-computers, said it plans to sell a video-game console in the country by year-end as the company expands the range of its products for consumers.

Lenovo set up a venture, Beijing Eedoo Technology Ltd., this month to operate the game-console business, Jay Chen, a company spokesman in Beijing, said by phone today. Other investors in Eedoo include Legend Holdings Ltd., the controlling shareholder of Lenovo, he said.

The maker of Thinkpad laptops will enter a market where Nintendo Co. and Shanda Interactive Entertainment Ltd. have struggled as Chinese players mainly subscribe to play games online on their PCs. Software piracy in the world’s second- biggest economy has also limited growth of the game-console industry, according to analyst Zhao Xufeng.

“Console makers have largely stayed away from the Chinese market because they can’t generate much software sales,” said Zhao, an online-games analyst at research company iResearch Inc. in Shanghai. “In other markets, console makers make most of their money from the software, not the hardware.”

Chen at Lenovo said he can’t provide details about software or content for Eedoo’s game console.

Lenovo shares rose 1.4 percent to HK$4.50 at the midday break in Hong Kong trading today, compared with a 0.7 percent gain by the city’s benchmark Hang Seng Index.

Nintendo’s iQue, Shanda

Nintendo, the world’s biggest maker of video-game consoles, set up its iQue Ltd. venture in China in 2002. Shanda, China’s second-biggest operator of online games, started selling consoles in 2005.

Games played on PCs account for most of China’s online-game market, iResearch’s Zhao said.

The console venture follows Lenovo’s expansion in the mobile-phone market this year. The Raleigh, North Carolina-based company sold more than 100,000 of its LePhone mobile devices last quarter, Chief Executive Officer Yang Yuanqing said this month.

Lenovo moved its headquarters to the U.S. from China after it acquired the PC division of International Business Machines Corp. in 2005.

http://www.bloomberg.com/news/2010-08-30/lenovo-planning-to-sell-video-game-console-in-china-by-end-of-this-year.html

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