Monday, September 25, 2023
HometechnologyChina lifts ban on foreign consoles

China lifts ban on foreign consoles

China has temporarily lifted its 14-year-old ban on foreign-made game consoles, opening up a hugely lucrative market to gaming giants such as Sony, Microsoft and Nintendo.

The relaxation Tuesday by China's State Council, which originally flagged the idea last year, permits "foreign invested enterprises" to manufacture games consoles within Shanghai's free trade zone and sell them in the world's second-largest economy.

But the products would still be subject to inspection, the Chinese government said, and the games are likely to remain under strict censorship.

China originally banned foreign consoles in 2000 citing concerns that violent games could have a detrimental effect on the mental health of young people. Instead, gamers have been brought up on a diet of PC games which makes up two thirds of the revenues generated in the country's gaming market. Nonetheless, despite the prohibition, games consoles have been on the illegal "grey market" for years – often at a deep discount.

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Big opportunity for console makers?

The liberalisation of the laws could pave the way for major players to gain a foothold in the Chinese gaming markets, which raked in revenues of around $14 billion in 2013, up 38 percent from the previous year, according to China's game industry body. The U.S. gaming industry brings in double this at $38 billion.

Chris Morris | CNBC

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"We recognise that China is a promising market and we are studying the possibilities in it, but at the moment there are no concrete plans," a spokesperson for Sony Computer Entertainment told CNBC on the phone.

Microsoft and Nintendo were not immediately available for comment.

Uphill battle ahead

But these companies are likely to face an uphill battle to establish dominance in China.

The video game sector has taken a hit globally in recent years as mobile gaming, which offers free games, has eaten in to the market share of big consoles.


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