China has officially lifted its longtime ban on video game consoles like the Xbox, PlayStation and Wii in the country. This has opened up a potentially lucrative market for manufacturers from Sony, Microsoft and Nintendo now that one of the world's most densely populated countries in the world has seen its market open up over night.
According to CNN, 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.
The restriction on manufacturing and selling consoles and games has existed since 2000. It effectively denied gaming companies access the world's most populous nation. Chinese officials had cited worries over violent content and the potential for moral decay in justifying its ban on video games.
While the lifting of the ban could mean a lot of the console in the future, it's affects are already beginning to take shape. Nintendo shares jumped more than 10 percent in Tokyo, while Microsoft went up 1 percent. Meanwhile, Sony was flat in New York trading on Tuesday following the unveiling of its streaming service, PlayStation Now, in Las Vegas at CES 2014.
According to CNN, the ban in China forced Chinese gamers to find their consoles and games on the black market to find the latest and greatest tech. Controversial game titles, which are specifically banned by the government for moral reasons.
A possible reason the country finally decided to lift its ban was perhaps its ineffectiveness on PC and mobile games, which flourished in the absence of any console-based games.
So far there is no word yet on whether manufacturers will embrace the Shanghai experiment. While most video game consoles are already manufactured by contractors that are currently based in China, the new rule requires units sold domestically in China to be built in the Shanghai Free Trade Zone. This would mean that manufacturers will be forced to shift supply chains and open new manufacturing facilities in order to sell to China. In other words, while the Chinese market is now open, it might take some time before consoles are flying off the shelves like they do in the United States or the U.K.
