Lenovo Spins Off Game Console BusinessLenovo Spins Off Game Console Business

Lenovo says it is spinning off a video game console business that is expected to launch its first product next year.

The Chinese computer maker, known in the United States for the ThinkPad laptop brand it bought from IBM in 2005, said the new company will be led by Luo Zheng, a seven-year veteran of Lenovo. Zheng has led the development of the eBox console over the last nine months within Lenovo, company spokesman Raymond Gorman said Monday in an e-mail to information.

Legend Capital and Legend Holdings will fund the new company. Legend Capital is the investment arm of Legend Holdings, which owns a 45% stake in Lenovo.

Gorman described the eBox as a "gaming and multimedia console project," but declined to provide further details. "We prefer not to speculate on any business decisions that the new company will make," Gorman said.

The Wall Street Journal, which first reported on the new company, said it would be called Beijing Eedoo Technology. The company planned to launch the eBox first in China.

A prototype of the console did not require a handheld controller to operate. Instead, a camera on the device tracked players' body movements, similar to the Microsoft Kinect motion technology unveiled this year for the Xbox 360, Jay Chen, a Lenovo spokesman, told the Journal.

Like many of its rivals, Lenovo, the world's fourth-largest computer maker by unit sales, is hoping to expand its portfolio beyond PCs and into other product categories, such as smartphones and tablet-style computers. Similar efforts are underway within Acer, Dell, Hewlett-Packard, and others.

However, Lenovo has yet to have much success outside of the traditional PC market. For example, the company launched in January at the Consumer Electronics Show a hybrid laptop that had a detachable tablet that users could take with them.

The two-in-one design made the IdeaPad U1 unique. Nevertheless, the system, which was set to be released in June, has been delayed and a firm release date has yet to be set. Lenovo maintains the U1 will ship this year.

In the smartphone market, Lenovo hopes to become a major player in China, where sales of the devices are soaring. The company this year launched the LePhone smartphone, but sales have been hampered by a touchscreen shortage, the Journal reported.