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For a decade and a half, the Chinese government thought console games would rot your brains. 

But gamers on the Mainland have been given a reprieve this week; companies including Microsoft, Sony and Nintendo will finally be allowed to make and sell their consoles anywhere in China.

The foreign consoles were banned in 2000, with the government citing the ‘mental wellbeing of China’s youth’ as a primary factor. In the years since, they have continued to release systematic edicts banning various games and gaming communities by targeting distributors and companies. Often, the games have been lumped together with porn bans, earmarked as too depraved for China’s youth.

It’s a narrative that has been reinforced by coverage of rehabilitation ‘bootcamps’, which treat extreme cases of extreme internet and gaming addiction in China. Internet addiction is classed as a clinical disorder in the county, and hundreds of centers run military-style camps that aim to quash out addictive digital behavior.

Since January, the future has been looking a little brighter for the foreign console giants though. The government partially lifted the ban, negotiating an agreement which would allow the companies to make and sell their consoles within the 11-square mile radius of the Shanghai Free Trade Zone. It posed a logistical problem for the foreign giants, who had to make sure their operations fell within the permitted areas.

The new manufacturing and distribution guidelines also include an important restrictive glitch; games on the mainland will still be subject to censorship, meaning that while the consoles will be able to begin building their ecosystem, it’s possible the games will be at least partially localized.

Even so, it’s still a big win in the eyes on console makers. Confusion over details and timelines didn’t stop Nintendo’s shares from jumping to a two-and-a-half-year high following the initial announcement in January, as excitement grew over the massive untapped potential of the Chinese console market.

During the 15-year ban, there were still avenues for gamers to get their hands on coveted foreign consoles. Grey markets shops and online stores have provided an outlet for those desperate to buy the latest machines. The underground halls of Zhongguancun’s electronics market in west Beijing are a good bet for finding a console, just like Huqiangbei in Shenzhen. Online stores have also peddled the banned boxes, but like other unsanctioned foreign goods, the markup is high, and after-sale service is nonexistent. 

It’s also important to note that owning a console has not been illegal, nor has the possession of unsanctioned games, just their distribution. But while consumers were able to hold on to their products, the government succeeded in shutting off  something just as important in modern console gaming; network ecosystems. The last decade has seen the explosion of global communities built around console gaming, and the ban has left Chinese players locked outside, unaccommodated in various aspects of the console experience. 

One of the resulting problems is much more troublesome to the Chinese government than the unrealized possibility of mentally unhinged youth. Restrictions have fueled a mass of free and pirated games in the market for PC and mobile, adding to China’s IP woes as they try to paint a more friendly face on their growing entrepreneurial ecosystem.

Despite optimism from console companies, the total removal of the ban is unlikely to have a floodgate effect, at least at first. Like other banned foreign products, console giants Wii, Playstation and X-Box lack a wide-scale cultural following in China. Local players are also looking to leverage their reputation to wedge themselves into the market.

Huawei unveiled their Android-based Tron console just as the laws were being eased late last year. Chinese internet giant Alibaba also injected $10 million USD into US Kickstarter-favorite, Ouya, earlier this year, fueling questions around a China entry.

Whether it’s the large foreign console companies or new players back home, there’s industry consensus that China has huge potential for growth in console gaming. Sales of mobile and console gaming this year are expected to stretch to over $22 billion USD in China, a 23% increase year-over-year with an estimated 446.3 million gamers within China.

@catecadell

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