Lenovo Group, a leading maker of personal computers, is working on an eBox video game console. The console reportedly will feature certain capabilities that are similar to those, found in Microsoft Corp.'s Xbox 360. The company hopes that the video game device will help it to grow its revenue and will also allow to initialize its own service business.

"We saw game consoles as an area with growth potential," said Jay Chen, a spokesman for Lenovo, in an interview with the Wall Street Journal.

Lenovo reportedly formed an internal team to create a console prototype, then spun it off as a separate company earlier in August. The game console company is called Beijing eedoo Technology and it will manage the development of the console called eBox. Eedoo plans to launch the eBox in China first.

According to the report by the WSJ, the early prototype of the eBox features a technology that allows users to interact with the console using a special camera, a technology similar to Microsoft Kinect, which is due out next year. It is also known that the console will be compatible with high-definition TV-sets and will also be able to download additional content from the Internet. Other technical capabilities or specifications are unknown at this point.

It is unclear which game designers plan to develop exclusive games for the eBox, but given the fact that the piracy is tremendously high in China, it is highly likely that the games will be subscription-based and will require Internet to play.

Although Lenovo is the world's fourth largest PC maker in the world, it badly needs to expand to keep its positions. Moreover, in order to improve profitability, it needs to create services business.

The game console business does bring profit for large companies like Microsoft, Nintendo or Sony, which can afford selling advanced systems at a loss and then profit on software sales. However, in developing nations like China the piracy is too high to hope to gain on software alone. On the other hand, without ability to play pirated games the hardware itself will not become popular. For example, Zeebo game console launched in 2009 in Brazil, relied on Internet downloads, which essentially excludes piracy. However, the device does not seem to be popular.

Eedoo's website claims the eBox will be launched in China by the end of 2010.

Tags: Lenovo, eBox, Eedoo