China ‘Temporarily’ Lifts Ban on Sale of Game Consoles

The nearly 14-year-old ban on the sale of video game consoles in China was “temporarily lifted” early Tuesday, according to Reuters. China’s State Council lifted the ban with a brief statement, permitting “foreign-invested enterprises” to both manufacturer consoles within Shanghai’s special economic zone and sell them throughout China. This isn’t a blanket approval, however; each company must first receive government approval before engaging in any commercial activity.

Tuesday’s announcement is not surprising. The Chinese government created the Shanghai Special Economic Zone, one of several in the country, last year with the intent to allow the manufacture and sale of foreign consoles, and government officials began to hint at an end to the ban as early as January 2013.

China banned foreign consoles in 2000, citing fears that exposure to violence and outside culture would corrupt the minds of Chinese youths. Games still found their way into the country, of course. Loopholes regarding “plug ’n play” consoles allowed manufacturers like Nintendo to breach the market in conjunction with Chinese companies. One such venture, the iQue Player, allowed Chinese gamers to enjoy Nintendo 64-era games built-in to the controller, albeit years after those games debuted in other parts of the world.

The ban also didn’t cover PC games, which exploded in popularity in the country as online multiplayer titles matured in the early 2000s. Any benefit for the “minds of Chinese youths” as a result of the console ban was therefore quickly lost as throngs of Chinese gamers descended upon internet cafés to fuel their growing interest in online gaming, occasionally to a dangerous and fatal extent. This obsession with PC games created a healthy game industry in the country, with revenue of $13 billion in 2013, compared to just $15 million in yearly revenue for the limited official console market.

It’s unclear how “temporary” the lift on the console sales ban will be, but foreign manufacturers such as Sony, Microsoft, and Nintendo are all eager to gain official clearance to the Chinese market. Despite the rampant piracy in the country, the potential upside of hundreds of millions of new customers is too strong to ignore. The move also helps to correct an inconsistency in the game console industry. Almost all consoles are manufactured in China, so it’s promising to see those who make the products get an opportunity to enjoy them.

Investors have long predicted today’s steps by the China State Council, so there has yet to be any significant movement on shares of the three major console companies.