So consoles are legal in China. Now what?


Yesterday we got the news that finally, 100% officially, game consoles can be legally sold in China, so long as the companies selling them are operating from within Shanghai’s Free Trade Zone. We’ve known this was coming for quite a few months now, but now that the day is actually here, you may be wondering: what’s next?

In the short term, probably nothing. Just because consoles are legal doesn’t mean that Microsoft, Sony, or Nintendo can start selling in China right away. In addition to setting up advertising and distribution channels, they’ll need to figure out how their online services will work in China. They’ll need to revise or make new agreements with boatloads of sponsors. They’ll need to make simplified Chinese localized versions of any games they want to release in China. And, of course, they’ll need to run all the games through China’s Ministry of Culture for approval. That means no Battlefield 4, among many other games.

In short, it’s probably going to be a while before legit consoles are decorating Chinese store shelves.

But is all this work this even worth it? The answer isn’t as obvious as you might think, and this is something Sony, Microsoft, and Nintendo will have to think carefully about. China is a huge market, but it’s also a market where gray-market consoles and hacked games that cost a few cents apiece have been widely available for years. China doesn’t necessarily have hordes of gamers wishing to get their hands on consoles; those who want the devices have likely already bought gray-market imports.

The other issue is that consoles are terrible at China’s favorite game genres: MMORPGs and MOBA games. Just look at the top ten games Chinese gamers searched for last year; almost none of those titles would work well on any console that exists right now because they’re best played with a mouse and keyboard.

In the long term, there will also be domestic competition to worry about. Sure, China’s first domestic game console, the CT-510, didn’t prove to be much of a threat to anyone. But with the console market now up for grabs, I wouldn’t be surprised to see one of the big gaming companies — Tencent, probably — take a stab at its own console. It would be designed from the ground-up to appeal to Chinese gamers by offering a good infrastructure for free-to-play titles and easy interaction with MMORPGs and possibly MOBA/RTS games as well.

So now that consoles are legal, what does the future hold for Sony, Microsoft, and Nintendo? I’m not sure. But it’s not likely to be as smooth sailing for any of them as some might suggest (and as their currently-soaring stock prices might indicate).

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