After a 14-year pause in play, China has finally waved the green flag to let overseas makers of video games and game consoles compete for a share of the vast mainland market — but only if they set up shop first in Shanghai’s new free trade zone.
The decision by the State Council is an attempt to open up the country’s service industry to overseas investors and means that popular products such as Sony’s PlayStation, Microsoft’s Xbox and Nintendo’s Wii will become available in China if their makers establish their business in the zone.
Foreign-invested game companies have been locked out of China since 2000 when the central government shut the doors to foreign video games, game consoles and accessories, and prohibited existing video game centers from expanding or buying any new machines.
Beijing imposed the ban to prevent young people becoming addicted to violent foreign content and to encourage domestic publishers to promote politically correct games to players.
The new rules will allow offshore firms to produce and market their products from Shanghai but there’s no clear word on how foreign companies would be allowed to sell the products and services.
Nevertheless, there are reports that China’s Ministry of Culture will let the Xbox One and PS4 into China as early as mid-2014. Microsoft has also been working Chinese multimedia services provider BesTV to acquaint mainland game players with the Xbox.
And it’s not hard to see why. Revenues in China’s video game industry grew 38 percent last year to nearly US$13.73 billion, according to the industry tracker China Games Party. PC games accounted for nearly two-thirds of revenues, the group said. Client-based PC games brought in US$8.87 billion, more than four times the amount browser games generated. Mobile games rang up US$89.39 million and console-based games an even smaller amount – just US$14.87 million.
Apart from foreign video game consoles and games, the government will also relax controls in the zone over foreign investment in fields ranging from international shipping, credit investigation and performance brokerage, to entertainment, training and telecommunications. Two dozen kinds of administrative approvals will be waived for foreign investment in these fields.
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