In our last article titled "20 Years Of Play Station," we brought to you how the gaming world saw its evolution driven by Sony (SNE, Financial). But this ever-evolving segment is not just about the consoles and their modernization but a lot beyond that. Reports say a U.S. video game major is making a great foray into the Asian continent in partnership with an Asian tech giant. This clearly signifies the fact that the gaming world has become unstoppable and its ambit ever increasing. Let us delve a little dipper to find out the new development in the world of gaming and how it will the business as a whole.
Gaming liaison
US video game service Ouya is turning to Asia to capture the growth that has eluded the startup on its own home turf.
The Santa Monica, California-based firm has entered into an agreement with the Asian smartphone giant Xiaomi in its quest to reach the household of every Chinese house and gain the edge of reaching the largest population of the world. Xiaomi is undoubtedly the largest smartphone player in China and Ouya can reach out to the Chinese consumer base through Xiaomi’s new streaming boxes and “smart” TVs, an Ouya executive and a source at Xiaomi close to the deal to was quoted as saying.
Xiaomi, on the other hand, is eyeing to become China’s gadget king. After hitting the headlines recently for being the third largest smartphone sellers of the world and the largest in China beating the smartphone bigwigs like Apple (AAPL, Financial) and Samsung (SSNLF, Financial) on its home turf in a matter of just three years. Of late Xiaomi has been making ambitious moves in the tech space beyond mobile gadgets. Last year, it expanded into the TV and set-top box business with its “MiBox” and “MiTV.”
Ouya Chief Executive Julie Uhrman said, “Details are still getting hashed out, but it's likely Ouya will get a dedicated channel on Xiaomi software installed on those devices, on which gamers can shop for and download a selection of its independently developed games later this year.” She also added that equations are being worked out for Xiaomi to market Ouya games.
“For the likes of Xiaomi’s MiTV, its set-top boxes and other Android set-top boxes that are entering the market, this could be a turning point in bringing great content and developers to gamers and into a region that they have never had access to before,” Uhrman told in a press release.
Ouya, which raised funds on crowd funding site Kickstarter, began selling a $99 game console based on Google’s (GOOG, Financial) Android software last year but failed to impress with the sales numbers.
The road ahead
This year, Ouya started marketing its software as an app through which developers sell games on other hardware makers’ devices. But the company, which has over 40,000 developers and more than 900 games on its platform, has sealed few partnerships, such as with Mad Catz Interactive Inc. (MCZ, Financial) to stream games onto its M.O.J.O console.
Whether the Chinese take to gaming on TVs remains to be seen. But its deal with Xiaomi, which models itself on Apple, hands the startup a chance to distribute its content in a fast-growing video game market.
“Unlike games on Apple and Google mobile devices, games developed for Ouya are designed to work on TV sets with controllers, similar to the Xbox and PlayStation. Ouya and Xiaomi are discussing launch titles and marketing now,” Uhrman added. “The developers, Ouya and Xiaomi will share revenue,” she said but did not give the details of the ratio proportions of the liaison.
China is the world’s third largest gaming market, where revenues from the gaming sector saw an upside by more than a third to around $14 billion last year. The government’s liberalized move in January to allow Microsoft (MSFT, Financial), Sony Corp and Nintendo (NTDOY, Financial) to sell gaming consoles has added fresh lease of life to the gaming hardware segment in China.
Chinese telecom equipment maker ZTE (ZTCOY, Financial) also recently penned a deal with game developer The9 (NCTY, Financial) to release the “Fun Box” console.
“The whole industry is still in a very early development stage,” Uhrman said. “There is a sea of opportunity for both” Xiaomi and Ouya.
Parting Words
The Gaming world seems to be really on high buoyancy gaining higher highs every time. Also just as it seemed that Xiaomi is losing its steam it is coming up with another new venture which looks quite promising. From an investor’s point of view irrespective of the company it would be wise to create a pocket in your investment portfolio to house the holdings in gaming companies since this is one domain which has gained good mileage over the last few years and will be a great revenue generator in the near future. For now it would be best to create some cash in hand available for investment in the gaming sector and keep a close track of this segment to locate opportunities for systematic investment in the game zone.
