With the Chinese economy showing signs of trouble, it may come as good news to citizens suffering from market malaise that the ban on sales and manufacture of video game consoles has been lifted. Interested citizens may soon be able to distract themselves from their financial worries with the entertainment offerings of Sony, Microsoft, and others. Consumers shouldn’t get too excited just yet, however, as there will be a series of negotiations and permitting processes with the Ministry of Culture that companies must first go through before being able to sell their products.
Nintendo shares were up 11% Wednesday on the news at $128, the highest level in two and a half years, as access to the world’s third largest video game market by revenue came one step closer to being opened.
Despite the absence of console games, PC and mobile games are still very popular, a fact which may pose a marketing challenge to manufacturers having to sell to a consumer base who is accustomed to accessing their games without the need of dedicated gaming hardware. In addition, many are too poor to afford the high cost of today’s video game consoles and will instead patronize one of the many internet cafes available in order to access their video entertainment. Still, perhaps the internet cafes will soon have an area set aside for console gaming for those who cannot afford to purchase one of their own.
The move by China puts an end to a 14 year ban on video game console sales, which was originally imposed with claims of adverse effects on its youth. With a dubious record on intellectual property and copyright, the current climate in China is illustrated by the fact that illegal consoles can be obtained in Beijing’s “Silicon Valley” region known as Zhongguancun. Furthermore, the illegal consoles are made to run pirated software, which can be had for around $1 per game, much lower than the current price of up to $50 for an official copy.
Even though all these hurdles exist, game companies are sure to press on, with the Chinese gaming market currently valued at $22.2 billion (up 23% over the previous year), it would be foolish not to.