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China Lifts Ban on Game Consoles, Allowing Sony and Microsoft Access to China Market

| Feb 23, 2015 04:23 AM EST

Microsoft announced that the Xbox One will receive the Windows 10 update in November.

The Chinese government has announced the full lifting of the long-standing ban on the production and sales of game consoles in the country, giving global tech companies such as Sony and Microsoft access to the huge market.

The Time Weekly reported that the announcement was made on Jan. 29 through the State Council after the one-year trial run passed the satisfactory level in the Shanghai Pilot Free Trade Zone. The ban had been implemented 14 years ago.

With the lifting of the ban, China is expected to earn 30 to 50 billion yuan ($4.8-$8 billion) from revenues in the huge game console market, which could trigger tough competition between local developers and overseas tech companies.

The report said that top foreign companies engaged in the game console industry such as Sony, the maker of Playstation, and Microsoft, the X-box creator, have long been interested in penetrating the huge market in China. This also includes local companies such as Tencent, Alibaba and Huawei, who are willing to compete with the global firms and share income in the potentially lucrative market.

The Guangzhou-based paper said that Microsoft has already partnered with China's BesTV for a specially designed Xbox for China to be launched in the Shanghai free trade zone. Microsoft has reportedly invested $79 million and holds 40-percent share in the joint venture. The two companies aim to develop the next generation software in home gaming technology.

Sony, on the other hand, has established two joint ventures with Oriental Pearl, a Shanghai Media & Entertainment Group subsidiary, the paper reported. One of the ventures will develop the software, while the other will take up hardware development.

Local developers have also invested in the market as Alibaba, which released its Android-based console two years ago, has reportedly partnered with U.S.-based firm OUYA to develop its game software and game console.

Similarly, Huawei has launched its home game console called TRON last year and showed interest to enter the Chinese market.

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