China’s Great Game Wall Opens (For Now)

As postulated some months ago, the Chinese State Council has announced that the 14-year ban on video game consoles in mainland China is being ‘temporarily’ suspended. There is no indication on any kind of term limit or end date so far. But, ‘foreign-invested enterprises’ will now be allowed to sell gaming consoles in China (once they pass a cultural department inspection).

Originally, this ban was implemented when China’s Cultural Ministry declared they were harmful to the mental health of Chinese youth. However, like the United States attempts to ban alcohol in the 1920s and 30s, Chinese gamers took other routes to get their gaming fix.

Bringing Water To The Desert

Black markets of illegal consoles and games sprung up once the ban went into effect. China also had a huge boom in internet cafes; some looking more like PC warehouses (like the one pictured here) as game-starved Chinese citizens poured in to play online.

The drought also boomed the mobile device market and gaming apps have now become the largest form of online interaction.

Statistically, Chinese gamers play more often and longer sessions than the average US gamer on a weekly basis. More Chinese citizens are playing on mobile devices, not just for their convenience or cultural acceptance, but due to the lower cost and availability. The growing online culture has caused concerns and internet gaming addiction is treated as a serious issue in China.

With the console ban lifted, this could be a hungry market for the next generation of gaming consoles. But, will they be hungry enough?

Selling Refrigerators to Eskimos

Now that Microsoft and Sony can sell their new platforms in China, will there be buyers actually able to afford them? The average worker’s salary is about 4,000 yuan ($634) a month. That would be just about the cost of one X-Box One, X-Box Live and maybe one game. For most Chinese, the idea of putting down half their week’s pay for one game is out of the question.

For manufacturers, there are even more hurdles – including the stipulation that products have to be made in the Shanghai free-trade zone before they can be shipped into China. The three major players (Microsoft, Sony and Nintendo) do recognize the opportunities, but currently none have announced any major shift to pursue them.

In addition to red tape and financial limitations, new consoles will have to compete with black market and pirated games which flood the Chinese market due to lax copyright laws. Some pirated games can cost as little as $1.00.

Cited: 

• http://news.yahoo.com/china-suspends-ban-sale-foreign-video-game-consoles-064118506–sector.html
• http://www.gameskinny.com/wdwrj/new-study-china-surpasses-us-in-gaming