Microsoft Corp expects to chalk up another year of more than 30 percent sales growth in China and plans to sell its new Xbox 360 game console there next year, a senior executive said on Wednesday.
The world's top software firm, which engineered a series of strategic acquisitions in the world's seventh-largest economy this year, aims to carve out a bigger slice of a $20 billion software market that has grown almost 40 percent annually between 1999 and 2003.
"Sales-wise, we're improving," said Tim Chen, Greater China chief executive, in an interview on the sidelines of a business forum in Shanghai.
"We had over 30 percent growth in our last fiscal year. This year, hopefully, we can maintain similar growth," he told Reuters.
Experts and analysts have long dubbed China the world's de facto capital of piracy, which has been a plague for software vendors and game console sellers alike, and urged Beijing to step up enforcement of intellectual property rights.
Some industry executives say the government has heeded such calls in the past year and is now tougher on piracy.
"With the improving intellectual property rights situation, I think there's going to be a lot of improvement in the next couple of years," said Chen, formerly top executive for Motorola Inc in China.
Microsoft is pinning big hopes on its much-anticipated Xbox 360, hoping to rule a $25 billion global video game market dominated by Sony Corp's blockbuster PlayStation and Nintendo Co Ltd's third-biggest selling GameCube.
Microsoft has said it wanted the Xbox 360 on US store shelves on November 22. Chen said he hoped to start selling the console in China in 2006, but stressed that the timing of its launch was not set in stone.
Sony and Microsoft now manufacture many of their game consoles in China, taking advantage of lower labour costs. Microsoft bought more than $1 billion worth of Xboxes from contract manufacturers in China last year.
But the country has yet to take off as a market for game consoles.
Sony began selling its PS2 in China in 2004, acknowledging piracy issues but arguing that someone had to take the lead.
Yet the technology giant has said little on the subject since, with analysts saying their plans have been waylaid partly by pirated games that sell for as little as 10 yuan ($1.20) apiece. Nintendo never bothered to launch its own console in the country.
Banking initially on its software business, Microsoft has invested $50 million in China so far this year, and planned to invest another $10 million before year-end, Chen said.
That fulfils part of a pledge, made in 2002, to invest 6.2 billion yuan ($766 million) in China - one of the largest foreign commitments in the country's software industry at the time.
Of that amount, Microsoft expects to have invested $120 million by the end of this year.
"We expect to invest in two more ventures by the end of the year, bringing our total investment for the year to $60 million," Chen said on the sidelines of the forum.
The US firm is quickening its forays into China, its fastest-growing major market.
Most recently, the company said this week that it and International Finance Corp, the World Bank's commercial arm, would together invest $35 million in software maker Chinasoft International Ltd.