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China to End Ban on Video Game Consoles, May Open Market to Microsoft, Sony, Nintendo


If a video game company operates sales and production in Shanghai's new free-trade zone, it can sell consoles throughout the country, but it must first seek approval from the Culture Ministry.

Through a new set of rules issued by the State Council today, China is moving to repeal its 13-year ban on video game consoles within the country. The new rules are part of a series of regulations related to the brand-new free-trade zone in Shanghai. Essentially, foreign companies like Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), and Nintendo (OTCMKTS:NTDOY) will be able to sell their consoles and games all throughout China if they operate sales and production within Shanghai's new free-trade zone. However, each console will still need to be approved by the Culture Ministry.

This news comes just days after the South China Morning Post reported that China would lift bans on politically sensitive foreign websites like Facebook (NASDAQ:FB), Twitter, and the New York Times in this zone, which spans 28.78 square kilometers of the city's international business-centric Pudong area. It was also announced recently that Microsoft would be partnering with Chinese Internet TV company BesTV (SHA:600637) to develop family-friendly games.

The Wall Street Journal reported today's story on gaming consoles, and made sure to note that consoles have been available for a long time through "unofficial channels." However, since China banned consoles in 2000 over concerns that the games were harmful to young people, computers and phones have been the preferred method of gaming in the People's Republic.

No timeline is set for the reintroduction of consoles to the Chinese market, but the big three video game companies will be paying attention, ready to push the Xbox One, PlayStation 4, and WiiU through lucrative official sales channels. Moreover, the change might be good news for console game-developing companies like Take-Two Interactive (NASDAQ:TTWO), which is already riding high after its massively successful launch of Grand Theft Auto V, a game that was launched on September 17 and earned more than $1 billion in its first three days of sales.

For more on Shanghai's free-trade zone, read China May Allow Facebook and Twitter in Shanghai Free-Trade Zone.

Follow me on Twitter: @JoshWolonick and @Minyanville
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