The impact of game censorship and regulations on foreign game consoles in China

Strict censorship and digital game localization made the Chinese government implement a 15-year ban on foreign or domestic manufacturers and sales of game consoles back in 2000. However, the ban was only applicable to mainland China, so large grey import markets are visible in Hong Kong, Macau, Taiwan. In 2014, China lifted the game console ban, opening up a hugely lucrative market for gaming giants such as Microsoft, Nintendo, and Sony. However, there is a twist, foreign companies have to partner with the domestic game manufacturer, and the products would still be subject to a list of inspection criteria (e.g., violent games that would influence the mental health of young people). So, the giant companies face an uphill battle to establish their dominance in this 23-million-dollar market. This study provides an in-depth analysis of the structure of the game consoles industry in China into three stages: pre-censorship stage, censorship stage, and post-censorship stage. It investigates of the complexity of the censorship system of the game consoles industry. Several examples illustrate how the above stages affect the success of foreign game console manufacturers in the Chinese market.