It is the opinion of Niko Partners that it is very unlikely that China’s long-standing ban on consoles will be overturned in the near future. The South China Morning Post article published this week referenced a Free Trade Zone in Shanghai endorsed by the highest levels of Chinese government. This is true, and was announced a week ago. There are also other Free Trade Zones either established or under consideration throughout China (Shenzhen, Tianjin), yet the establishment of those zones has not caused the same type of assumptions that consoles would be allowed there if production moved to those zones. There is no specific mention of consoles in the announcement of the Free Trade Zone, and we think that the journalist of the SCMP made some assumptions that consoles would be included if the culture ministry would have authority over the game content.
We believe that this year there have been strides in improving trade and the possibility of more open rules for games in China. But, we think it goes too far to say that if a Free Trade Zone opens in Shanghai that it will automatically mean that consoles would be included if the manufacturers switch their production facilities to within Shanghai.
At this point, Niko Partners believes that it is still highly unlikely that the ban on consoles will be overturned in the near future. Should that ban be overturned it will be approved by many regulatory bodies and there would be significant policies defining what would be permissible and what would not. The regulatory issue concerns the console systems themselves as well as the content of console games. It should be noted that Niko Partners has not interviewed any government officials regarding this matter in the past few months, but based on past conversations the decision to overturn the ban was still to be a long way off, if ever, and was to be based on numerous factors that had yet to be decided by the Ministry of Culture, Ministry of Industry and Information Technology, the (then) General Administration of Press and Publications, trade ministers, public safety ministers and more.
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