China suspends ban on game consoles

China has temporarily suspended a nearly 14 year old ban on game consoles, opening the door for Microsoft, Nintendo, and Sony to enter the potentially lucrative market. But, analysts warn that the gamer culture in the country is very different than the traditional model here.

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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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  • reply
    January 8, 2014 12:15 PM

    Steve Watts posted a new article, China suspends ban on game consoles.

    China has temporarily suspended a nearly 14 year old ban on game consoles, opening the door for Microsoft, Nintendo, and Sony to enter the potentially lucrative market. But, analysts warn that the gamer culture in the country is very different than the traditional model here.

    • reply
      January 8, 2014 12:22 PM

      Ha, not that it stopped consoles from being sold. Everyone had a 360. It's just that everyone had copied games too.

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        January 8, 2014 12:35 PM

        Pretty much this. They would need to go with a business model where they are focused primarily on the hardware sales and just learn to live with a territory that is going to have rampant piracy if they want any money from there. That won't make EA happy at all since it probably means MS wouldn't put as much into software marketing and co-op/mdf for publishers to utilize.

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          January 8, 2014 2:08 PM

          [deleted]

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            January 8, 2014 3:03 PM

            They could release neutered version of the game that require in game purchases for the full game.

            in before thats what they do in the US

            But if they sold the games for the equivalent of $10 and you had to pay another $10 to unlock the rest of the game I think they'd do ok.

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              January 8, 2014 6:55 PM

              [deleted]

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                January 8, 2014 7:10 PM

                LoL does well in china and we charge 0$ to play the game :D

                The point is that if EA can make SOME money out of this huge huge HUGE (1.4b) market, then they should even if it means making much less money per sale.

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      January 8, 2014 12:48 PM

      Does anyone have a quick synopsis on how the gamer culture is very different than elsewhere?

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        January 8, 2014 7:06 PM

        sounds like f2p has long since won the battle for wallets?

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      January 8, 2014 12:57 PM

      [deleted]

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      January 8, 2014 1:06 PM

      [deleted]

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      January 8, 2014 2:46 PM

      It doesn't sound like it makes good business sense to take China up on this deal at all. You have to make them in a place that is too expensive and they get sold in China on the "gray" market anyway. Also a lot of copies sold are bootleg so not much money to be made on the software side which is where all the money is.

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      January 8, 2014 5:40 PM

      Suspends ban...?!?!

      What the English?!

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