China has temporarily lifted their ban on foreign consoles, the BBC reports. Nintendo, Sony, and Microsoft will now be able to build their consoles in a designated free trade zone in Shanghai, where Chinese government officials will then inspect the consoles before they are allowed to finally go on sale.
Back in September 2013, the Chinese government announced its intentions to lift the ban, but no one knows how long its current suspension will last. Many speculate that the announcement and subsequent lift are the byproduct of an economic slowdown in China after years of rapid growth.
Another theory is that this policy change—possibly serving not only as the next step in China’s globalization, falling in line with other, wider economic reforms and liberalization in recent years—could be a response to the illegal gaming trade.
The ban was first instituted in 2000, with Chinese officials growing concerned about the effects of games on young people. Since then, Chinese gamers have had to acquire consoles via black market exchanges, which remains active and thriving despite governmental attempts to hinder it. Even with a gaming black market, most people in China have simply turned to PC gaming, which reportedly comprises two-thirds of the estimated $13 billion dollar market that China represents.
No matter the reason behind it, the question now is how Sony, Nintendo, and Microsoft will take advantage of this lift respectively, and what it means if and when China decides to re-institute it.
“We recognize that China is a promising market,” Sony told the BBC after the news broke. “We will continuously study the possibility, but there is no concrete plan at this stage.”
Carving out a decent slice of a $13 billion dollar market could easily offset any initial losses caused by setting up shop there. But if the ban were to come back down quickly, this potential new branch could prove to be a costly error, something The Big Three are surely considering.
Should one, or all of the big companies decide to make a play here, though, Sony and Nintendo’s proximity to China provides an obvious advantage. Others believe that Microsoft, based on its history outsourcing hardware, could be in the best position. In theory, they could quickly team up with a third-party electronics contractor to set up shop in Shanghai and start producing the consoles. Either way, this could mark a significant day in the gaming industry’s economic history if China decides to keep its shores open.