Games makers eye Chinese market

8 January 2014
BEIJING: Makers of games consoles have responded cautiously to the lifting of China's ban on sales of foreign-made products as the announcement by the State Council came hedged with various caveats.

Nintendo, which makes the Wii console, told Reuters the ruling changed little from September last year when China's government had first said it planned to lift the ban.

"This just means one step of the process has been taken," said Yasuhiro Minagawa, Nintendo's Japan-based public relations manager.

Microsoft has already said it would establish a $240m joint venture with BesTV, an arm of the state-owned Shanghai Media Group, to produce "family games and related services", while Sony indicated it was looking at entering the Chinese market with "great interest".

The lifting of the ban is temporary, however, and restricts manufacture to the Shanghai Free Trade Zone while also requiring products to be inspected by cultural departments. All of these factors may lessen the enthusiasm of major brands to commit investment.

China banned gaming consoles in 2000, citing their adverse effect on the mental health of the nation's youth. As a result, the $14bn market is currently dominated by PC games which account for almost two thirds of the total, with the remainder split between browser gaming (15.4%) and mobile gaming (13.5%), according to data released at the annual China games industry conference in December.

The increasing penetration of smartphones has boosted the mobile gaming market, with consumers devoting up to one third of their time on such devices to playing games and an increasing number of users prepared to pay relatively small monthly sums for gaming apps.

This may affect the willingness of Chinese consumers to spend heavily on a games console in a slowing economy. The Financial Times noted that when Lenovo unveiled a home entertainment console in 2012 – marketed as a family exercise device to get around the ban on gaming devices – it was priced at more than $600, or twice the cost of a comparable Xbox.

The few foreign consoles that do exist in China are typically bought in Hong Kong and brought back to the mainland.

Data sourced from Reuters, Financial Times; additional content by Warc staff
Share with a colleague
Your email address
Your colleague’s email address
Comment (max 150 characters)