China's State Administration for Industry and Commerce said yesterday it was investigating the US technology firm for "monopoly actions" related to its flagship Windows operating system and Office suite of software.
The day after the announcement of the investigation, Microsoft introduced its newest Xbox One model to the potentially vast Chinese market ahead of the official sales launch, which a company representative said would be September 23.
"We are deeply committed to deliver the very best games and entertainment experience for fans in China," Yusuf Mehdi, chief marketing and strategy officer for Xbox, told reporters at an event billed as a chance to "experience" the Xbox.
The slick presentation at the Shanghai Film Museum included Xbox games projected onto a big screen on a darkened stage with deafening sound effects for a crowd of 100 journalists and game developers.
Xbox signs were prominently displayed but Microsoft's coloured square logo was conspicuously absent.
Microsoft said earlier today that it seeks to comply with Chinese law.
The Xbox One is the first gaming console available for purchase in China through authorised sales channels since 2000. Illegal machines, smuggled into the country, are widely available from online vendors and electronics markets.
China last year set up the country's first free-trade zone (FTZ) in Shanghai as a test bed for economic reforms, among them allowing foreign firms to manufacture game consoles for sale into the domestic market after passing authorities' inspections.
The move has opened up the market to the likes of Microsoft, as well as Sony's PlayStation and Nintendo's Wii.
Analysts said Microsoft was targeting high-end users in China with the Xbox One, but the price -- from 3,699 yuan ( USD 600), 50 per cent more than the basic USD 400 US package -- might prevent it from reaching a wider market.