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Microsoft

China has finally lifted its 14-year console ban, but it might be too late for Xbox and Playstation

PUBLISHED : Monday, 27 July, 2015, 1:39pm
UPDATED : Monday, 27 July, 2015, 1:39pm

While Chinese gamers have been able to buy grey market Playstations and Xboxes for years, and official ones since 2014, firms can now finally make and sell their products anywhere in China, after the remaining restrictions of a 14-year console ban were lifted.

The move comes as two of the world's most popular gaming consoles, Microsoft's Xbox One and Sony's Playstation 4, have struggled to gain market share in PC and mobile-gaming obsessed China.

The sale of consoles was banned in 2000 by the Chinese government amid fears games could have "adverse effects" on Chinese youth. However, this ban was largely ineffectual, with imported grey market consoles being sold openly in many Chinese cities.

In January 2014, the ban was effectively lifted when the Ministry of Culture decreed that foreign firms could manufacture consoles in the Shanghai Free Trade Zone and submit their products to inspection by relevant departments.

Microsoft entered the market in September 2014, with Sony following in March this year, both basing their operations in the Shanghai FTZ.

The latest move by the regulators means console makers can manufacture anywhere in China.

However, it is unclear whether the move will have a significant impact on console sales, which have been sluggish despite availability.

Legal sales of the Xbox One and PS4 are expected reach less than a combined 550,000 units in 2015, according to a report by Niko Partners, a research firm focused on the Asian games market.

The poor sales figures may be explained by the long availability of grey market consoles, limited range of games and the high price of purchasing through legal channels.

Console makers eyeing the Chinese market are also competing with a growing array of gaming platforms, including the dominance of PC gaming, the exploding popularity of mobile and the rise of smart TVs.

According to Newzoo BV, a research firm focusing on gaming markets, China is the largest games market in the world, with expected revenues of US$22.2 billion in 2015, a 23 per cent year-on-year increase.

PC gaming dominates the Chinese market, claiming 68 per cent (US$15.2 billion); mobile gaming is next biggest at 19 per cent (US$4.1 billion), but is rising on the ranks, having grown 50 per cent year-on-year.