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Interesting.

I think this is an important market to MS, and one they could possibly win, maybe.

They have the advantage of launching first, and its not like most chineese people will be jumping to buy a Japaneese product like the Wii or PS4....

I'm not a cultural expert at all, but I believe that China does not really like Japan all that much, especially since Japan slaughtered many Chineese people in WWII.  

http://www.breitbart.com/Big-Peace/2013/08/29/30-Aug-13-World-View-China-and-Japan-really-DO-hate-each-other

 

Not really sure if this would impact sales any, but it might.  Also Microsoft has the reputation advantage as they make Windows, and China has a lot of people with PCs, so for better or worse, they should be quite familiar with Microsoft and thier products.