China Allows Video Game Consoles, But There’s A Catch

The world’s largest video game market has been closed to console makers, at least officially, for more than 13 years. That changed today, as China said it would allow video game consoles to be manufactured and sold within the Shanghai Free Trade Zone.

So companies like Sony, Microsoft and Nintendo should be doing backflips of joy now, right? Maybe not, at least initially. Even with access to a market that topped $13 billion in revenue last year despite serious content restrictions, access to Chinese gamers isn’t necessarily a guaranteed money machine for console makers for several reasons.

Chinese gamers have a preference for online games, specifically of the free-to-play variety

In the absence of non-bootleg console games, many Chinese citizens have been getting their gaming fix by playing computer games online. Most of thse games are of the freemium variety, meaning they’re free to download or play in browsers and monetized through in-game purchases.

While Western console games obviously offer a completely different experience, there is some thought that the high upfront cost of these games might not go over so well with people in China. Console manufacturers may have to spend extra money and energy showing why paying for AAA games is worth it, or change the way they normally do things to adapt to the market. Either approach will require a lot of work with no guarantee of runaway success.

The lifting of the console ban is only temporary

The Chinese government put a halt to console games in the first place due to concerns over content and the effect those games would have on children—or at least that was the reason given. Nothing has changed since 2000 to make anyone think the industry has changed in any significant way in that regard, and a strong argument can be made that video games in general are pushing the boundaries on violence and taboo subjects more than ever.

Since China can easily change its mind back at any time, console makers are going to be cautious about efforts to make machines in Shanghai. Why spend a lot of money to set up shop there if the rug can be pulled out at any time?

People with resources can already get console games in China

As Kotaku explains, if you have the will and the money, you can already find console games in China. Even new systems like the PS4 are available via the gray market, though they cost quite a bit more than they do in North America or Europe.

That means gamers who have taken the steps to enjoy console gaming are unlikely to see this announcement as a big deal. Of course, anyone squeamish about skirting the law would benefit if systems and games start becoming available without chicanery, but will that be a large enough group of potential customers to warrant a large investment from Sony, Microsoft or Nintendo?

You can bet those companies will be discussing the answer to that and other questions over the next few months. It’s a situation worth keeping an eye on, for sure.