Hong Kong escapes games console ban

All the first-release Xboxes have been pre-sold

Microsoft has denied reports that Hong Kong will be barred from receiving its newly-launched Xbox games console because of fears over piracy.

[Piracy] should not have an impact on the [Hong Kong] launch of Xbox

Microsoft's Yolander Chan

The machine went on sale to US consumers on Thursday and is scheduled to become available in Japan in February and Europe from March.

But newspaper reports had suggested Microsoft would steer clear of Hong Kong and China where software piracy is a major problem.

Microsoft's Hong Kong marketing director Yolander Chan told local radio the Xbox would eventually appear in the shops but "we haven't confirmed a date yet".

Past problems

The US software giant has been burned by Asian piracy in the past - most recently unauthorized and counterfeit versions of its Windows XP operating system appeared in China and Hong Kong months ahead of the launch of the official Chinese version.

Xbox games offer quality graphics but local games need developing

Some estimates say counterfeit software accounts for 90% of all software used in China.

Mrs Chan confirmed software piracy was a major concern but said time was also needed to develop local versions of games and overcome production constraints.

Microsoft is investing $500m (£346m) in marketing the machine in the US alone and its founder Bill Gates has given his full backing to the project.

US consumers will have to pay out $299 (£205) for the machine and about $50 (£34) for games.

Tough market

Some reports have suggested Microsoft may make a loss of more than $100 (£64) on each machine, profiting instead from high margins on the games. Earnings from such a strategy would suffer if cheap, pirated versions of games were to become readily available.

Sony's Xbox rival, the Playstation 2 (PS2) system, has sold 20m units worldwide but has yet to launch in Hong Kong.

Nintendo's Gamecube will be launched in the US in three days' time.

All three companies are bracing themselves for a crucial 12 months.