Gaming Console Ban Lifted in Shanghai FTZ

One of the latest developments for the new Shanghai free trade zone is the lifting of a ban on foreign-made arcade and home entertainment gaming consoles imposed in 2000. For an unspecified trial period Chinese authorities are permitting the manufacture and sale of games consoles within the Shanghai free trade zone, while importing these entertainment systems remains restricted. The official statement announcing the decision noted that the relaxing of the rule was an “experiment” aimed at exploring the experience of reform.

There is much speculation as to what prompted the change of policy, but many agree that the multi-million yuan illegal trade in these consoles had a lot to do with it. Currently PC and internet games are worth an estimated 83bn yuan annually and have a huge following in China, but the sale of gaming consoles has been restricted for thirteen years, ostensibly to protect the mental health of the country’s young people.

Foreign game console manufacturers such as Sony, Microsoft and Nintendo are reportedly poised to cash in on the lifting of the restriction, but analysts note that competition for market share will be stiff as companies try to break into a market that has not had access to products like PlayStation, Wii and Xbox. Also, the proliferation of black market consoles and pirated games will be difficult to overcome.

Nonetheless, American company Microsoft will be partnering with Chinese company BesTV New Media to manufacture consoles in the Shanghai free trade zone. While the timing of this partnership has not been made public, the CEO of BesTV told newspapers in November last year that both companies have a serious interest in supplying home entertainment systems in China.

Located in the North East region of Pudong District, the Shanghai Waigaoqiao Free Trade Zone is the first of its kind to be established in China. It was launched in September 2013 and is widely viewed as a testing ground for many of the country’s economic reforms.