

China is a massive, mostly untapped market for several industries, and video games are no different. For over 14 years, the Chinese government has maintained a ban on the sale of home video game consoles, and while the ban was effectively lifted earlier this year, the sale of console units was still strictly controlled. Now, those final restrictions have been lifted, making it even easier for foreign game makers to sell their systems within China.
While the ban on consoles has been officially lifted for several months, console makers like Microsoft and Sony Corp were forced to funnel their systems through Shanghai, which is home to China’s experimental free-trade zone. Restrictions that are normally in place throughout the rest of China are relaxed in the free-trade zone, allowing the government to test out new regulations and economic models before expanding them to other parts of the country.
Console sales had first been allowed within the confines of Shanghai’s free-trade zone before the ban was finally lifted, and until now the city has remained the sole port of entry for foreign game systems. With that last restriction now lifted, however, foreign game makers will be able to manufacture and sell their systems anywhere within China.
Last year, analysts at PricewaterhouseCoopers LLP estimated that the Chinese game market alone could be valued at over $10 billion, making it a highly desired market for consoles like Xbox One and PlayStation 4, but while the Chinese market is largely new to foreign console makers, that does not guarantee their success within the country. China may be the world’s most populous country, with an estimated population of around 1.36 billion people, but a large proportion of the country also lives in poverty in rural areas.
Console makers also face a market that is already more accustomed to playing games on PC and mobile devices, with some of the country’s most popular Western games being online PC titles like World of Warcraft, Dota 2, and League of Legends. League of Legends is of particular note because its developer, Riot Games, is now owned by Chinese gaming giant Tencent Holdings Ltd.
It is still unclear how well consoles will perform in China even with the restrictions lifted, but a Sony spokesperson told the Wall Street Journal that the change in policy “is great news for us,” and the company remains dedicated to expanding its presence within the country.
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