Japan's Sony Corporation and cultural company Shanghai Oriental Pearl (Group) Co, Ltd will organize two joint ventures to manufacture and market Sony's popular PlayStation consoles and games in China.

It is unknown whether Sony will sell its PS4 as is or design a special gaming console for China. Shanghai Oriental, which is building its game business portfolio, is expected to help Sony get past China's byzantine regulatory process for getting licenses.

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"This is a big market," said Xu Xiaojun, board secretary of Shanghai Oriental Pearl.

"We want to build a big culture and entertainment platform where we can utilize our traditional advantages in entertainment content."

One JV will make PlayStation hardware; the other will focus on software. The JVs will be located at the Shanghai Free Trade Zone or FTZ.

One of the ventures will have registered capital of $1.6 million and will be 51 percent owned by Shanghai Oriental Pearl Culture Development and 49 percent owned by Sony's branch in China.

The other JV will have registered capital of $7.0 million and will be 30 percent owned by Shanghai Oriental Pearl Culture Development and 70 percent owned by Sony in China.

Sony and Shanghai Oriental Pearl are collaborating in response to the suspension of the ban on game consoles within Shanghai's free trade zone, according to Sony Computer Entertainment, which is the unit responsible for the PlayStation. The company said details would be announced later.

Sony's push into the potentially lucrative but difficult Chinese gaming market comes one month after Microsoft Corporation and BesTV New Media, a maker of electronic products, said they would introduce Microsoft's Xbox One game console in China this September.

Because of the past ban on console gaming, China's vast army of gamers has its eyes glued to their smartphones and tablet computers. China temporarily lifted a 13-year ban on sales of gaming consoles early this year. It banned the sa;es of game consoles allegedly because of the product's negative effect on the mental health of its youth. 

In April, the Shanghai government said console makers can make and sell consoles in mainland China through "foreign-invested enterprises" in the city's FTZ.

Analysts said Chinese game developers and publishers are adopting a "free to play" model where games make money by selling in-game upgrades like special weapons. Game console makers normally earn revenues from selling gaming console and games.

Analysts noted that without any assurance their intellectual property will be respected, it's hard to see how any manufacturer can make money in China.

China's gaming industry is expected to be worth $10 billion in sales next year, said PricewaterhouseCoopers LLP.