Microsoft looks to Chinese video games to level up in competition with Sony after missing out on Genshin Impact success

Microsoft Corp is stocking up on Chinese video game content to emulate Sony Group Corp’s success with Genshin Impact, sources said, solidifying China’s transition from a land only of players to a hub of blockbuster developers.

The US software giant and Japan’s vanguard of technology have for some years been offering big money to small developers to nurture programmes and licence titles, but the impact of Genshin Impact has added a sense of urgency, sources said.

The action role-playing game from budding Shanghai-based studio miHoYo has generated billions of dollars since its release two years ago, and raised the bar in multiplayer, cross-platform games – the type sources said Microsoft and Sony seek in China for their Game Pass and PlayStation Plus subscription services.

Growing Western interest in Chinese games reflects a maturing of China’s game development industry, analysts said. Chinese games are now on a par with big-budget Western games, said Daniel Ahmad, senior analyst at research firm Niko Partners.

“Chinese game developers are trying to standardise their development tools, create advanced production processes, invest in really large-scale teams,” Ahmad said. “Ultimately, that helps provide them with the competitive edge to reach a broad audience both in terms of geography and platforms.”

Microsoft has been building a team to scout for Chinese games, two industry sources said. The Xbox maker mainly filled its subscription roster with big-brand titles but is now wooing even independent studios with big-money offers, they said.

At the same time, filings showed Microsoft is expanding its subscription service to personal computers and handheld devices, increasing the appeal of Chinese developers such as miHoYo which have developed a reputation for multiplayer, cross-platform compatibility – with Genshin Impact being a prime example.