China
has lifted its longtime ban on video game consoles, opening a lucrative new
market for manufacturers including Sony, Nintendo and Microsoft.
The State Council said in
a statement that it will now allow consoles to be manufactured in the Shanghai Free Trade Zone,
an experimental testing ground for economic reform.
China had implemented a blanket restriction on the manufacture
and sale of consoles and games in 2000, denying gaming companies access to the
world's most populous nation. Chinese officials had cited worries over violent
content and the potential for moral decay in explaining the ban.
Nintendo
shares jumped more than 10% in Tokyo, while
added 1%.Sony , which had unveiled a new
streaming game service in Las Vegas, was flat in New York trading on Tuesday.
With
the ban in place, Chinese gamers keen to try consoles were forced to rely the
black market to find the latest hardware. Controversial game titles -- which
are still frequently banned by the government -- were also available from
underground suppliers.
Yet
the restrictions did little to slow the proliferation of PC, online and mobile
gaming in China, all of which flourished in the absence of console-based
entertainment.
It's
not yet clear whether manufacturers will embrace the Shanghai experiment.
While
most video game consoles are already manufactured by contractors based in
China, the new rule requires units sold domestically in China to be built in
the Shanghai Free Trade Zone. The requirement could force manufacturers to
shift supply chains and open new facilities in order to sell in China.
There is also no guarantee the rule change will stick. The State
Council described the repeal as "temporary" and regulators will need
to approve foreign products.
Still,
the rule change suggests the government is moving forward with reforms in
Shanghai.
The
city's free trade zone -- 29 square kilometers in area -- is an experiment in
promoting trade, expanding foreign investment access and liberalizing the
financial sector, all of which are tightly controlled and regulated now by the
government.
China's
general framework for the area includes expanded foreign access in industries
that previously placed heavy restrictions on outside companies, including
banking.
Written by thecodewhiz
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