http://www.nytimes.com/2009/04/28/technology/28cell.html?_r=1&ref=global-home
So what's the solution to piracy here? Region lock? That gets broken really quickly, but there doesn't seem to be any other way for foreign brands to compete here. The market is obviously huge, but they're not even getting a scrap of their share with the prices they propose. I haven't seen one place that sells legitimate dvds, games, or comic books. Textbooks? The school buys one copy and everyone pays for the beautifully bound xerox copy.
Online games survive because there are hourly fees to be paid. Note: hourly, not monthly. No one believes in credit card prepayment here. You simply can't squeeze out a deposit from them. So unfortunately, if Blizzard hopes to make a dime in China, Battle.net will have to charge.
What it comes down to is that no one is willing to pay premium foreign prices here. Companies that recognize this and find optimal localization strategies will gain much deeper market penetration in the future.
Next topic: How Yum! Brands (KFC, Pizza Hut) is pulverizing all competitors in China.
