Fuze Entertainment, a Chinese game console maker founded by Wang Feng, CEO of game developer LineKong, has announced $60 million USD in funding from a consortium including IDG Capital, Northern Light Venture Capital, Fosun Ventures and LineKong. The company has a core team coming from Huawei, NVIDIA, Microsoft, TCL and Tencent.
The new funding is primarily earmarked for new gaming content and user accumulation, said Wang. He added that they are looking to raise between $100 to $200 million USD in the next round.
The Chinese government has been slowly easing restrictions on game console industry since 2014 after a ban that laster over a decade. They first allowed companies to sell and manufacture on the mainland provided that they have headquarters and factories within Shanghai‘s special economic zone. They then eliminated all previous restrictions on how these companies can operate in China, allowing them to set up shop anywhere.
Although there are still contrasting opinions as to whether the favorable policies will actually see significant market growth, it has undoubtably brought vigor to the sector as more companies, foreign (Microsoft, Sony) and domestic (Huawei, ZTE), are flocking to the market.
Fuze is still tinkering with the first generation of its new product named Zhanfu, but Wang disclosed that the game console is under testing for hardware, system and contents. At the same time, the startup is setting up a developer platform that offers all-round support in funding, hardware, game centers and player communities.
The company is planning to unveil and take orders for its first-gen product within this year. Nearly one hundred games will be released gradually over the first year from its launch.
Of course as a new entrant to the sector Fuze will face formidable challenges from Sony’s PS4 and Microsoft’s Xbox One, which are now available for Chinese players.
However Wang is very optimistic when taking about competition from the two game console giants. Like most foreign companies, Sony and Microsoft encounter localization problems like the region lock, high prices, and long game-reviewing processes Fuze will target these aspects to get ahead in their early growth stages.
Image credit: Fuze