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Microsoft cozies up to 'family gaming' venture in China

Redmond and Chinese Internet company BesTV will explore the possibilities of family-friendly gaming through a joint venture.

James Martin/CNET

Microsoft and Chinese Internet company BesTV New Media have announced a partnership to create a joint venture based on "family gaming and services."

Posted in a bulletin on the Shanghai Stock Exchange and reported first by Polygon, Microsoft and the Chinese media firm will invest a total of $237 million to launch the jointly owned company.

According to a filing on Monday, the joint venture will possess starting capital of $79 million. BesTV will hold a controlling 51 percent stake, and Microsoft will take 49 percent of the venture.

The statement was vague in terms of the joint venture's aims, but "family games" and "services" were mentioned.

The reference to family gaming is likely to relate to Microsoft's Xbox console. While game consoles are officially banned in China, reports surfaced in July suggesting that the Chinese government may be planning to end the 13-year ban, which could give the likes of Microsoft, Nintendo and Sony free reign to promote their games and consoles and tap into the Chinese consumer market.

The ban would reportedly be lifted as part of an overall strategy to create a "Shanghai Free Trade Zone" to open up the Chinese economy, but gaming companies would have to gain approval from "culture-related authorities." So if Microsoft and BesTV focus on family-related gaming, then they may face fewer hurdles than companies that offer games with age ratings, violence and adult content.

The Shanghai Free Trade Zone may also soon be a more welcoming place for social-networking powerhouses Facebook and Twitter.

BesTV is a subsidiary of Shanghai Media Group, and boasts 18 million IPTV subscribers. The joint venture's board chairman will be chosen by the Chinese Internet firm, and the CEO will be selected by Microsoft.

A Microsoft spokesperson told CNET in an emailed statement:

We can confirm Microsoft is working with BesTV, a subsidiary of the Shanghai Media Group (SMG), to explore new opportunities in Shanghai and China. We believe there is great market potential and partnership opportunities here and look forward to sharing more details soon.

We have contacted Microsoft and will update if we hear back.