UPDATED 09:40 EST / JANUARY 30 2015

Alibaba Executive Vice Chairman Joseph Tsai NEWS

Alibaba invests $10 million to save Ouya, a palm-sized game console

Alibaba Executive Vice Chairman Joseph Tsai

Alibaba has injected $10 million in capital into Santa Monica-based game console maker Ouya, paving the way for the tiny Android-powered system to find new life in China.

Ouya first began as a record breaking Kickstarter project that earned over $8.5 million from backers, making it the third highest earning Kickstarter project to date. The Kickstarter page calls Ouya “A New Kind of Video Game Console,” and promises that the system will be fully open to modification. Under a section titled “Hackers Welcome,” Ouya’s creators wrote, “Have at it: It’s easy to root (and rooting won’t void your warranty).”

Ouya’s library features games that are available for free either as full games, demos, or games supported by microtransactions.

The console was criticized for a lack of compelling titles and underwhelming hardware specs, and despite its early hype and the support of over 63,000 backers, the fun size game console had trouble gaining the traction it needed to stay afloat.

That is where Alibaba comes in.

According to a report by the Wall Street Journal, the Chinese e-commerce mega giant has invested $10 million into the floundering company with the intent of building Ouya’s software and game library into its own set-top gaming system. While Ouya could never find its audience in the U.S., the inexpensive device with a library of over 1,000 games could find a huge, untapped market in China.

Since its incredibly successful IPO in September, Alibaba has been acquiring several American startups with the intent of importing technology and services to China. Ouya is the latest of these acquisitions, and it it poised to take advantage of China’s recently lifted restrictions on the sale of video game consoles within the country.

Several American companies have sought a foothold in China since the world’s most populous country began easing its economic restrictions over the last few decades. Apple Inc. began manufacturing cheaper versions of the iPhone to target the Asian market, and after initial difficulties it found huge successes in China.

Ouya is not the only Android-powered game console, but Alibaba will likely leverage the creator’s experience and the device’s sleek design to push their set-top offerings out to more Chinese homes.


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