Microsoft entering a joint venture with BesTV in Shanghai is potentially quite interesting for Microsoft, and as a follow on it could become quite interesting for the console segment. On the other hand, there is no specific language about true console hardware or console sales in the Chinese announcement of the JV. BesTV has offered TV-based gaming in China for a long time, specifically console-type games mostly targeting casual gamers rather than core gamers who primarily comprise the console user base. BesTV is partially owned by the government, and happens to also be the sole IPTV license holder in all of China. That may be more of a factor that IPTV is not the dominant technology for TV-based digital entertainment in China than anything else. The company’s headquarters is located in Shanghai, so it could fall under the planned free trade zone.
However, none of this means that consoles will be allowed in China and even if they are it by no means indicates that the gamers would shift from their PC-online and mobile gaming based culture to fully embrace consoles. Those who have wanted to play on consoles already do, as they are readily available throughout the country at the same price as you would find in countries where they are legally sold. An overturn on the ban would certainly open up services and games distribution and customer support to console users though, and would encourage them to play legitimate games rather than pirated copies in order to take advantage of all of the online services that would be available (in theory).
For Microsoft this could be an interesting partnership. BesTV will benefit from Microsoft’s knowledge across the board, but for the console segment in China – we will need to wait and see what comes of the policy that bans consoles today, and for the appetite for consoles in the broader Chinese gamer base.