China Welcomes Foreign Video Game Makers

By Lauren Dodillet

Last week China’s Ministry of Culture finally lifted a 14 year ban on foreign video game consoles, giving companies like Nintendo Co., Sony Corp., and Microsoft Corp. access to what is projected to be a $25 billion dollar plus gaming industry by 2016—up from $13 billion at the start of 2014. The ministry enacted the ban in 2000, afraid that games would have detrimental effects on the mental health of China’s youth. But following the success of a pilot program testing the products in Shanghai’s free trade zone (FTZ) throughout 2014, all further restrictions were removed, allowing companies to sell their consoles and games throughout China.

The pilot program in Shanghai allowed industry retailers to manufacture and sell consoles out of the FTZ to China’s 490 million gamers (and counting), so long as they submitted to certain regulations: only consoles made in the FTZ could be sold inside the country, and each one had to be individually inspected before shipping out.

Shanghai’s trial run opened the door for gaming companies to expand their businesses across the country. However, certain restrictions still apply: licenses must be obtained from the government in order to manufacture goods on Chinese soil, and the government retains the right to censor any material that might “harm national unity… [or] violate public morality,” reports CNN Money. Typically, games that are censored include realistic violence and/or political themes, meaning several blockbuster games in the United States like Call of Duty: Advanced Warfare or Destiny won’t make it to Chinese shelves.

“Content regulation has been the primary barrier to success for all foreign game companies, for all platforms,” says Lisa Cosmas Hanson of Niko Partners, a Chinese gaming industry researcher.

In the absence of consoles, Chinese games have been played on computers and mobile devices. The games have little in common with US action-style standards; popular Chinese games are often cartoonish, replacing blood with purple goo or skeletons with tombstones, reflecting current content laws—unaffected by the ban lift.

Chinese consumers have also liberally pirated content not available for legal sale in the country. With the ability to download games for free off the Internet and play on hacked computers, gaming companies face converting many gamers to the pay-to-play model. The main draws will be better customer service and tech support, better translations, and the ability to play with others on the games’ official networks.

(Photo by włodi via Flickr)