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China suspends ban on game consoles

by Steve Watts, Jan 08, 2014 12:15pm PST
Related Topics – Microsoft, Nintendo, Sony

China has temporarily lifted a ban on video game consoles that has been around for more than a decade. The ban, passed in 2000 in light of concerns about children's mental health, has kept console manufacturers like Microsoft, Nintendo, and Sony out of the country. Video games still flourished, though, leaving the market reliant mostly on free-to-play PC and mobile games.

Reuters reports that the suspension allows "foreign-invested enterprises" to make consoles inside Shanghai's free trade zone, and then sell them after they are inspected by the Chinese cultural departments. It is considered temporary, though, and officials did not give details on how long this suspension would last.

According to data from a recent Chinese gaming conference, PC games hold almost two-thirds of the market in the country, followed by browser gaming at 15% and mobile gaming at 14%.

Analysts feel that while console manufacturers could push into the region thanks to this legal change, they may be facing an uphill battle. Since so much of the gaming culture is accustomed to playing for free on devices that serve other purposes, a dedicated gaming box and upfront costs for packaged games would be a large shift. On top of that, a Hong Kong brokerage firm claims that 70% of Chinese gamers earn less than 4,000 yuan ($634 USD) per month. Paying $30-50 for a game was described as "unbearable or unthinkable" by Yang Angi, a 23-year-old Chinese gamer.

Statements from Nintendo and Sony both seemed cautious, as they said they will both have to look into the possibility. Nintendo, at least, has already seen the market shift in anticipation. A follow-up report from Reuters says that stock in the company jumped by 7.5%, to a two-and-a-half-year high, following China's announcement.




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