The launch, which was delayed a week for reasons Microsoft did not reveal, comes as the US company faces a government investigation for alleged "monopoly actions" regarding other products like its flagship Windows operating system, used on the majority of computers in China.
In January China formally authorised the domestic sale of game consoles made in its first free trade zone (FTZ) in Shanghai, ending a ban in 2000 originally instituted due to worries over content. The FTZ was established exactly a year ago on Monday.
At a branch of Chinese electronics chain store Suning in downtown Shanghai, a salesman said the outlet sold more than 30 limited-edition consoles priced at 4,299 yuan ($699) after staying open past midnight. A more basic package retails for 3,699 yuan ($602) in China.
Buyers were lured by Kinect, which obeys motion and voice commands, but some expressed disappointment at the lack of available games in China only 10 for the launch.
Prices are also far higher than other markets like the United States, where the website price is $400 for the basic console and $500 with Kinect.
"The console price is too high, the first batch of games has no attraction, can we buy something more practical?" said Diu Dasu in a microblog posting.
Of the ten games, half are sport or racing titles. Others are aimed at younger players, like "Zoo Tycoon" and puzzle-solving game "Max: The Curse of Brotherhood".
So far absent are first-person shooter games like the popular "Call of Duty" series, although Microsoft says it has more than 70 titles in the pipeline to bring to China.
Under the rules of the FTZ, games must pass inspection by cultural authorities, who conceivably could censor content they deem to be obscene, violent or politically sensitive.
A joint venture of Sony and Chinese tourism and cultural firm Shanghai Oriental Pearl Group is planning to start operations in the FTZ from December.
Microsoft chief executive officer Satya Nadella last week visited China for the first time since taking the post in February, in what Chinese state media portrayed as an attempt to appease regulators over the investigation.
The head of China's State Administration for Industry and Commerce, which is carrying out the investigation, met Nadella on Thursday and urged Microsoft to "cooperate" in the probe, China Industry and Commerce News reported.