China has announced it will ease the restrictions on the sale of gaming consoles and games. (Photo : Reuters)
China is officially lifting its ban on gaming consoles throughout the country, giving companies like Sony Corp, Microsoft Corp and Nintendo Co Ltd a chance to infiltrate one of the largest gaming markets in the world.
The ban was put in place in 2000 because Chinese regulators feared that gaming consoles would have negative effects on the mental and physical well-being of the youth.
In 2013, the ban was temporarily suspended in the 11-square-mile Shanghai Free Trade Zone, as a test, allowing foreign-invested companies to produce consoles in this area and sell them in China after being inspected by Chinese cultural authorities.
However, companies found it difficult to take advantage of this as it required them to apply to build new manufacturing facilities in the area and have each individual console inspected before being sold to greater China.
The Ministry of Culture declared the temporary suspension of the ban to be a success, recommending the ban be lifted throughout the entire country.
With the ban completely lifted, Sony and Microsoft have expressed their intent to enter the Chinese market.
"This is great news for us," a spokesperson for Sony said, stating that the company is committed to producing and selling consoles in China.
Even with the ban lifted, companies may face an uphill challenge considering how Chinese gamers have gotten used to gaming on their PCs, mobile devices and browsers. The appeal of mobile and browser gaming has been attributed to them being free, only charging for extra features.
According to Hong Kong-based brokerage CLSA, the average Chinese gamer makes less than 4000 yuan ($634) a month as of 2014. A new console in the United States can cost as much $500, with games costing about $60.
There are also concerns with the illegal trade of games, which is how Chinese gamers have played console games while the ban was in place. These sell consoles that have been modified to play pirated games that sell for about 1 USD each.
Despite these concerns, companies are excited to enter the Chinese market. The Chinese gaming market is estimated to be worth $22.2 billion this year, up 23% from last year, according to gaming research firm Newzoo BV.
Despite the 15-year ban, most game consoles have been produced in China for many years, with Foxxcon making the devices for Sony, Nintendo and Microsoft.
