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Lenovo's Next Expansion Plan: Games Consoles

Lenovo gamingLenovo, one of the world's biggest computer manufacturers, has already diversified into producing smartphones, and now it's going to produce a games console.

According to reports in the China Daily paper, 40-odd engineers have been split off from Lenovo's bigger entity to form Beijing Eedoo Technology, a unit formed specially to design, produce, and then market Lenovo's own-brand games console. Eedoo has received funding from Lenovo's parent holding company, Lenovo itself and the firm's Private Equity wing—indicating this is a pretty serious enterprise.

The device will be called ... wait for it ... the eBox, and it'll be aimed squarely at the Chinese market. We can speculate that if it achieves some success—inside China's gargantuan market—and is available at the right price, then Lenovo may attempt selling it outside China. In this case it'll be competing directly with the existing players like Sony and Microsoft—something its putative name already indicates.

The trick for Lenovo will be to craft a product that delivers on the hardware front (in terms of graphics, controllers, and so on) and on the software front too. The latter issue is the key, as traditionally in the console gaming model the majority of income from the devices comes later, as a percentage of software sales. As Reuters notes, inside China Sony, Microsoft, and Nintendo face huge difficulties in the hunt for profits due to rampant piracy—Lenovo, unless it uses a fearsome and proprietary form of DRM—will suffer the same issues, and it won't have the huge stable of existing game titles that the other consoles have. The DRM idea may be plausible though, with China's regulators likely to be more inclined to be friendly to an own-nation company, and we know that China already likes to pursue its own tech agenda, ignoring the rest of the world, thanks to notions like its proprietary Wi-Fi standards, and its odd CBHD "Blu-ray" HD DVD system.

To keep up with this news, follow me, Kit Eaton, on Twitter.