China drops game console sales ban, with conditions

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China has formally authorised the domestic sale of game consoles made in Shanghai's new free trade zone (FTZ),potentially opening its lucrative market to the likes of Sony's PlayStation and Microsoft's Xbox.
The move effectively lifts a ban lasting more than a decade on domestic console sales -- even though imports remain officially blocked, while illicit machines are already widely available.
Foreign firms will be allowed to make machines in the free-trade zone and sell the equipment into the domestic market after passing inspection by cultural authorities, the State Council, or cabinet, said in a document dated December 21 but publicly released this week.

But commentators point out that consumers are unlikely to want to pay high prices for consoles and authorised software, especially if it is slow coming to the market.
On China's largest online marketplace Taobao, some grey-market vendors were offering Microsoft's new Xbox One for around USD 656 and Sony's PS4 for about USD 566 today.
By comparison, the Xbox One debuted at USD 500 in the United States in late November while the PS4 was priced at USD 400.

But the machines already available in China -- which enter the market through unofficial channels -- can play pirated games that cost very little.

"It's impossible that game consoles will become big sellers, as they are relatively niche products in China. Authentic game consoles are usually expensive and nobody will purchase them except a few fanatical players," Yang Jiaxiang, an independent game design consultant, told AFP.
"They (companies) need government approval to issue game software in China, so they won't be able to keep updates up to speed unless China reforms its approval mechanism," he added.
The State Council has "temporarily" suspended a ban on consoles introduced in June 2000. The government said at the time the games had an adverse effect on the mental health of young people.

A plan it released in September shortly before the FTZ's founding included a similar move.
The latest document, among a series of measures regarding foreign investment approvals for the FTZ, said cultural authorities must still formulate "related regulations" to allow sales.
Some foreign industry officials fear that such regulatory approval -- conceivably to censor game content which China deems too violent, obscene or politically sensitive -- could be used as a potential trade barrier.
The relaxation does not apply to imported game consoles but only those manufactured in the FTZ, according to the guidelines announced so far.