Photo: Lenovo

Chinese computer manufacturer Lenovo is reportedly developing a games console it plans to launch in its notoriously difficult local gaming market. Cue the laugh track, for this move is either pure genius or absolutely suicidal.

Cracking a tough nut

Reuters reports that Lenovo, the fourth biggest PC manufacturer (if you exclude monsieur iPad) has dedicated 40 of its engineers to working in step with Beijing eedoo Technology to build and market the ‘eBox’ game console. The undisclosed investment is provided by Lenovo, its parent company Legend Holding, and the organisation’s private equity wing, Legend Capital.

This is in a move to, firstly, diversify away from their core, highly commoditised computer sales business and explore other avenues for generating revenue. But Lenovo gaming isn’t the way I would have expected them to do this.

Suicide pill?

Console manufacturers have tried and failed for years in the Chinese market due to rampant, unmitigated, buy-an-illegal-copy-in-a-store levels of piracy. The piracy factor alone makes it unfeasible to move into the market because console manufacturers rely on the sales of games to break even, let alone make a profit. Why would the eBox be any different?

Photo: ag2r / Flickr

Lenovo gaming clearly thinks it can buck the trend and make money off this. The rational mind says they’re crazy.

Masterstroke?

However, Lenovo is no stranger to long shots. The company came out of nowhere to become a considerable force in the PC industry in the last decade, and clearly has experience selling to the Chinese market. If the company has a retail strategy that would mitigate or completely stop piracy – unlikely, but you never know – it could well have a hit product on its hands with this Lenovo gaming strategy.

What do you make of this strategy? Can the eBox work? Or are we right to think Lenovo is committing strategic suicide?