18 April 2019

Game console makers won’t have it easy in China

Amid concerns that video games could corrupt the minds of the nation’s youth, China has banned video games consoles since the year 2000. But now, along with the official launch of free-trade zone in Shanghai, the curb has been lifted partially.

Top game console makers like Nintendo, Sony and Microsoft will now able to promote, market and distribute games legally in China. The two Japanese brands have both said they see great market potential and that they are ready to seize the opportunity. But tapping the demand may be easier said than done.

According to the FTZ policy details, even though selling of game consoles is now permitted, the sales have to be first approved by the regulators. quoted Gu Haoyi, a senior analyst from Analysys International, as saying that graphic violence makes up quite a large proportion of video games nowadays, but China still does not have a complete rating and censor system for that, so the hurdle of introducing new flagship games in the country is still high.

Securing the permission to launch popular games is far from a certainty.

Then there is the universal problem that console makers face — fierce competition from alternative gaming platforms such as mobile devices, with mostly free games. This is particularly the case in China. As gaming consoles vanished due to the 13-year old ban, most players have shifted their gaming to personal computers, smartphones and tablets.

For console makers, hardware is not the profitable part; it is software and games that are actually their golden eggs. But mainland users tend to expect games to be given away virtually free, although they may buy additional cyber gadgets, game weapons for example, a la carte.

“Console makers should develop another business model in order to compete with other alternative platforms. They could offer the games for free, but make money by selling additional items,” said Xue Yongfeng, another senior analyst from Analysys International, according to the 21st Century Business Herald. Such new model could lessen the negative impact made from rampant piracy, he added.

Some believe it would be an uphill battle for console games. Futuresource Consulting, a UK firm, warned recently that “with increased market convergence and non-traditional competition, we could be looking at the last generation of gaming consoles (Xbox One and PS4) as we know it.”

– Contact the writer at [email protected]


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