Xbox One’s and PS4’s China partners said to merge

18 Jun

Microsoft’s Xbox One and Sony’s PS4 were slated to officially hit the Chinese market through respective partnership with BesTV New Media Co. and Shanghai Oriental Pearl, subsidiaries of state-run Shanghai Media Group (SMG). According to the two Chinese companies’ announcement, trading for the two companies will continue to be suspended as the two are involved in SMG’s asset restructuring and integration. Due to the high extent of task overlap, the two companies are said to face a merger under the SMG.

Trading for BesTV and Shanghai Oriental Pearl had previously been suspended since May 2014. An announcement on June 18, 2014 from the two companies stated that they applied to suspend trading for no more than 30 days from June 18 in order to maintain fair information disclosure and investors’ interest as well as to avoid abnormal fluctuations in share prices. The companies said the move was made in view of incorrect media reports concerning the planned asset restructuring, and the uncertainty surrounding the asset restructuring, as the plan awaits further research and approval from related authorities.

Sources said the merger between BesTV and Shanghai Oriental Pearl has been decided. The latter is said to be integrated into BesTV with 2.5 shares of Shanghai Oriental Pearl for each share of BesTV.

BesTV and Shanghai Oriental Pearl forged partnership with Microsoft and Sony, respectively, to lift China’s 13-year ban on game console sales. Both Microsoft and Sony have their eyes covetously on the Chinese gaming market. If the two Chinese companies were merged, it would not have been much of good news for Microsoft and Sony, which have already been in a tight competition globally. Microsoft and BesTV’s joint venture in China is mainly responsible for Xbox services in the country and cooperation with Chinese developers; Microsoft’s subsidiaries in China control the production and marketing. Meanwhile, Sony and Shanghai Oriental Pearl’s joint venture is in charge of all PS consoles-related business in China. Therefore, Sony will take the larger impact if BesTV and Shanghai Oriental Pearl are merged.

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