Yusuf Mehdi, head of marketing and strategy for Microsoft's Xbox group, speaks at the launch event

Xbox One to launch in China in September

Microsoft will launch its Xbox One games console in China in September, becoming the first foreign firm to sell consoles there since a ban was lifted earlier this year.

China had banned games consoles in 2000, citing their adverse effect on the mental health of its youth, but the government lifted the prohibition in January opening the world's third-biggest gaming market to the devices.

Yusuf Mehdi, head of marketing and strategy for Microsoft's Xbox group, announced the September 23 launch date at an event in Shanghai. The console will cost 3,699 yuan (£355) without the Kinect motion detection system and 4,299 yuan with Kinect.

In the United States, the Xbox One with Kinect costs $499 (£295) and without it is $399, a difference of more than $200 compared with the respective prices in China.

In September last year, Microsoft reached a deal with Chinese internet TV set-top box maker BesTV New Media Co to form a joint venture to manufacture the consoles in Shanghai's Free Trade Zone.

Zhang Dazhong, a senior vice president at Shanghai Media Group, the parent of BesTV New Media, said at the event the Xbox launch had been approved by the government.

Microsoft is forging ahead with the launch despite yesterday's government announcement that the US software giant is the subject of a competition investigation.

Revenues in China’s gaming market grew by more than a third from 2012 to nearly $14bn last year, but piracy and the dominance of PC and mobile gaming may leave little room for legitimate console and game sales.

In May, Sony said it would set up a joint-venture with Shanghai Oriental Pearl Group to bring the PlayStation games console to China.

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