Oh My God, Shut Up About China's Game Console Ban Being Lifted

Ever since the news broke that an anonymous source thinks China’s Ministry of Culture is considering lifting China’s decade-long ban on game consoles, the world has gone a little crazy. Somehow, a single, anonymous source about something that might happen has gotten people so excited that Sony and Nintendo both saw their stocks jump and Forbes is talking about how those companies could “make billions” if the ban is lifted. Talk about irrational exuberance.

There are so many things wrong with this, it’s hard to even know where to begin. I could, of course, begin with how the Ministry of Culture has already denied considering lifting the ban. But these rumors are sure to pop up again sooner or later, so instead let’s begin with the stupidest thing I have read so far this year, which comes to us courtesy of the Forbes article linked above:

If the ban is lifted, however, sales of new game consoles could skyrocket. Console manufacturers would be free to promote their items and sell them in every store. And since consumers would no longer have to pay black market prices, consoles would become even more desirable to own.

The assertion that gamers are currently paying “black market prices” for consoles and thus would relish the opportunity to buy legitimate versions is shockingly ignorant, and leads me to wonder if the author of this article has even bothered to look into the console market at all. First of all, game consoles are sold on the gray market in China, meaning they’re sold openly in retail stores and online. Secondly, they don’t cost much more than they do in the US or elsewhere, and the extra cost is often because they’re hacked, so it’s immediately offset by the far lower price of buying cheap pirated games for the system.

In fact, let’s do a little experiment. In the US, you can get a plain Xbox 360 console for $200, while in China it’s closer to $250. But the gray-market console in China is generally hacked to play pirated games, so when you want to add on one new game to play, the US price rises to $260, and the Chinese price rises to $251. Add another new game, and the American Xbox now costs over $300, while the Chinese one now costs $252. You get the idea: the consoles themselves cost slightly more, but Chinese console gamers actually pay far less overall than Western gamers who are buying legitimate games for their systems.

Moreover, legitimizing console sales in China would actually make them more expensive than they are in the US, because — like all other imported electronics — their prices would need to be raised to cover China’s import duties. Gray market imports, since they’re technically illegal and enter under the radar, are not taxed, but official imports would be, and thus China’s gamers would get a taste of what China’s Apple fans already know: everything electronic is more expensive in China. At the end of the day, Chinese gamers would see something like a 10 percent reduction in the cost of consoles themselves, but that’s not nearly enough to offset the 7500 percent rise in the price of a new game for the system. At the end of the day, most Chinese gamers who want to actually play games on their console would end up paying significantly more than what they’re paying now if console imports were legalized.

One of China’s many shops that sells game consoles. Look at all those customers demanding Western game consoles. Oh wait, there aren’t any customers. The guys in red work there.

Now that we’ve torn apart the section of that article that’s blatantly incorrect, let’s turn to the part of it that’s just logically flawed. Why would sales of new game consoles skyrocket? Although they are technically illegal, western game consoles are widely available in China right now, sold openly in thousands upon thousands of electronics stores across the country. Any Chinese gamer who wants a console probably already has one. And since the consoles available now are for the most part hacked, gamers have access to thousands of games for extremely low prices. Legitimizing console sales might lower the prices of consoles slightly (as discussed above), but that would be nothing compared to the price of games, which would jump from at most 5 RMB ($0.79) for a pirated game to at least 370 RMB ($60) for a new, legitimately imported game.

As much fun as it is to beat up Forbes, let me stop and break this thing down for you list-style:

Why No One Should Be Excited About the Console Ban Being Lifted

1. It probably won’t happen. The Ministry of Culture has already officially denied that it’s considering dropping the ban. But even if that’s a smokescreen and the China Daily’s tip is legit (which is by no means guaranteed), I am certain the Ministry of Culture considers lots of things it doesn’t ultimately do. And no one I have seen yet has been able to adequately answer the question of why China would choose to un-ban game consoles right now, when there’s still no domestic competitor to benefit from the move. (No, the CT510 doesn’t count).

2. Consoles and console games are already widely available. Anyone who wants to can buy a game console in China for more or less the same price as anywhere else. And, as an added bonus, the games are usually extremely cheap. Chinese gamers who are interested in console gaming already own consoles. If there is a demand for consoles in China, it does not seem to have outpaced the supply available on the gray market, so legalizing consoles isn’t likely to cause any kind of sales spike.

3. Legalizing consoles just makes them more expensive. China’s import duties would almost certainly raise the price of legitimate consoles to close to what they currently cost on the gray market. And the price of legitimately imported games for consoles would be much, much higher than what gamers currently pay for widely-available pirated game discs, so the overall cost of playing games on a game console would skyrocket.