A Lenovo Group Ltd sign on display during the 2011 International Consumer Electronics Show in Las Vegas. Its video gaming unit Eedoo Technology plans to launch its first controller-free game console by June. Andrew Harrer / Bloomberg

Lenovo's video gaming unit to unleash remoteless game console in June

Eedoo Technology Ltd, the video gaming unit of PC maker Lenovo Group Ltd, intends to launch its first game console without a remote control by June, according to officials in the company.

The timing of the debut has been delayed for almost six months. Eedoo previously planned to release the product last November. Jack Luo, chief executive officer of the company, says Eedoo needs time to "further improve the product and provide a better user experience".

Luo calls the device a "home sports and entertainment console". It will come pre-installed with a set-top camera that enables the machine to detect a player's movements, a platform similar to Microsoft's Kinect for Xbox 360.

Eedoo is the world's second company to produce a controller-free game console, behind only Microsoft, Luo says.

Eedoo's machine may help Chinese PC maker Lenovo to diversify its product line and explore opportunities in the video game console market - a field dominated by Sony Corp, Nintendo Co Ltd and Microsoft Corp.

"We admit there is still a big gap between our machine and the products of international giants," Luo says. He says the development of Eedoo is in its initial stages and there is a long way to go before the company can grow stronger in that particular field.

Microsoft sold more than 8 million Kinect sensors during the first 60 days after its release on Nov 4. Kinect was available for Chinese players in the gray market at a price of about 1,500 yuan (166 euros) from that month. The gray market refers to the trade of a commodity through distribution channels which are unofficial, unauthorized or unintended by the original manufacturer.

Nemo Zhang, marketing director at Eedoo Technology, says Microsoft's Kinect poses a great challenge but Eedoo still had certain advantages in the Chinese market.

"First of all, Eedoo targets Chinese families, not hardcore game players," Zhang says, adding many hardcore game players may have heard the news of Kinect's launch and are interested in buying one in the gray market. However, the majority of Chinese families may not know about Kinect.

Eedoo will cooperate with local sales partners to promote its products, Zhang says. Customers can buy a machine through both traditional stores such as Suning and Gome, as well as online retailers that include 360buy.com, he says.

As a spin-off company from Lenovo, Eedoo will also make use of Lenovo's PC sales channels, which already have a good presence in the majority of Chinese cities.

Eedoo will also add Chinese cultural elements to its game console, making it different from Microsoft's Kinect, Zhang says. For example, Chinese people like to play mahjong, so Eedoo is considering including that.

"We may not realize all the goals in one go, but we will be continually ambitious," Zhang says.

Eedoo's Jack Luo anticipates more than 1 million game consoles to be sold annually after the first two to three years. More than 19 million families in China will be able to afford them if they are sold for under 3,000 yuan, according to a market survey conducted by Boston Consulting Group.

At present, 16 global video game developers have signed contracts to provide content for Eedoo. Around 30 free games will be included with each game console purchase, according to Luo.

Global revenue from video game hardware and software reached $60.4 billion (44.39 billion euros) in 2009. The figure may rise to $70.1 billion by 2015, says a report issued by DFC Intelligence.

In China, the total market volume is unknown because the Chinese government banned import of game consoles in 2000 and it is difficult to calculate gray market transactions.

The reason for the restrictions is because the government considers game consoles to be a potential danger to the physical and mental development of youth.

However, Zhang Yaqin, Microsoft's corporate vice-president who leads research work in China, said last year that Microsoft hopes to get approval from regulators to begin selling the Xbox in China.

The Xbox is manufactured in China and more than 40 million units have been sold overseas, according to Zhang. However, in China, Xbox suffers from both market inaccessibility and piracy problems.