Microsoft wants to bring more Chinese games to Xbox after missing out on Genshin Impact success

It seems that Microsoft regrets missing out on Genshin Impact, so now it wants to make up for lost opportunities. The company is reportedly scouting for Chinese games to strengthen its positions in the console race against Sony.

Genshin Impact’s success on PlayStation was a wake-up call for Microsoft

• According to Reuters, Microsoft spoke to miHoYo during the development of Genshin Impact, but didn’t manage to reach a deal.
• At the same time, Sony has been supporting Chinese developers for years as part of its China Hero Project initiative aimed at helping small local studios.
• In 2019, the company partnered with miHoYo to launch Genshin Impact on PlayStation. It is unclear how much money Genshin Impact generated on the platform exactly, but its lifetime revenue recently reached $3.7 billion on mobile alone.
• The game is free to play, but Sony takes a 30% commission on every in-app purchase that PlayStation players make in the miHoYo’s title.
• So it is no surprise Microsoft regrets missing a global hit like Genshin Impact on its platform. That’s why the company wants to catch up and level up its competition with the Japanese publisher.

Microsoft’s foray into the Chinese games market

• Microsoft has been building a scouting team to look for emerging Chinese games, two sources familiar with the matter said.
• The company also started offering big deals to small independent studios to bring their games to Game Pass.
• “Xbox contacted many projects in China and these projects primarily focus on developing console and PC games,” Luo Zixiong, CEO of Shanghai-based Recreate Games, said.
• According to an anonymous studio, Microsoft “recently offered a licensing deal many times bigger for a sequel” to its game that was added to Game Pass three years ago. So Xbox spares no expense to boost its subscription service.
• “Chinese game developers are trying to standardise their development tools, create advanced production processes, invest in really large-scale teams,” Niko Partners senior analyst Daniel Ahmad told Reuters. “Ultimately, that helps provide them with the competitive edge to reach a broad audience both in terms of geography and platforms.”
• A recent example of Xbox’s new strategy is Chinese battle royale Naraka: Bladepoint, which caught the attention of both Microsoft and Sony. But the game’s publisher NetEase prioritized Xbox to make the title a Game Pass exclusive earlier this year.