China lifts ban on foreign games consoles such as PS4 and Xbox

A government U-turn on games consoles has presented major industry players with a new $11.4bn market opportunity

A vendor sells game consoles including Xbox One and Sony's PS4. China has formally authorised the sale of game consoles, potentially opening its lucrative market up to the likes of Sony's PlayStation and Microsoft's Xbox

China’s State Council has announced its decision to temporarily lift a 14-year ban on selling video games consoles, giving rise to various opportunities and fresh challenges for major console players.

The announcement failed to specify how long the suspension would last, although it did include a select few details about logistical changes. The State Council said that it would allow foreign firms to manufacture consoles in Shanghai’s free trade zone, which would later be passed on to the mainland for sale, given that they pass a rigorous inspection process carried out by China’s cultural departments.

The anti-console policy was first introduced in 2000 and was originally intended to protect youths from game-related distractions, however the government’s U-turn appears to signal a change of heart and a new market opportunity for major industry players such as Sony, Microsoft and Nintendo in particular.

In terms of revenue, China is the world’s third-biggest market for video games despite the absence of foreign-made consoles and a government that appears highly averse to gaming in itself. According to research by PwC, the country’s video game market is worth an estimated $11.4bn. However, China’s problems with regards to video game pirating and the domination of mobile and PC gaming may well see new participants falling foul of fresh challenges in the near term.

The costs of console gaming also appear incompatible with the Chinese market, given that the nation’s average earnings fall far short of those in rival console markets such as Europe, the US and Japan. With the new PS4 priced at $399 and the Xbox One at $499.99, many Chinese consumers will simply be priced out of the market.

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