China Temporarily Lifts Ban on Consoles

The State Council has officially announced that game consoles will be allowed in China, if manufactured within the Shanghai Free Trade Zone. Item #32 in an announcement by the State Council on January 6th confirms what was tentatively announced on September 27th, 2013, which is that the console ban has been lifted for foreign and domestic game consoles. However, the detailed regulations have not been finalized nor announced. Games will be regulated by the Ministry of Culture. Hardware will be regulated by the Ministry of Industry and Information Technology.

One key point of analysis is that the Chinese console market will not be what many Western observers are anticipating. The hardware, connectivity, content, distribution and services will all be designed within Chinese government standards. It is unclear what that means yet. We would caution our clients against thinking that this means the existing consoles sold on international markets will simply be dropped into China with localized versions of current games. Additionally, as a reminder, there has been a vibrant grey market for consoles for more than a decade, and most gamers who strongly wanted a console have already purchased one. The market will open up for mainstream consumers and for those who want the online services however. We are taking a wait and see stance for now.