China is the world's biggest gaming market. But between 2000 and 2015, most game consoles weren't officially available for purchase in the country. The reason? A government ban.
It hasn't always been this way. After China opened its market to the world in 1978, home consoles found their way in. They were very expensive for the average Chinese consumer though -- and consequently, homegrown knockoffs started to populate the market. The most famous one was a clone of the Nintendo Famicom (the Japanese version of the NES) called the Subor Video Game System. It introduced Chinese gamers to early Nintendo games... many of which were also pirated.
Then 2000 arrived. It started with a parental outcry over children becoming addicted to video games. Soon, the government banned foreign home consoles from being made and sold in the country.
Did it stop people from gaming? Not quite.
Some played smuggled games on smuggled devices, brought in illegally by shops from places like Hong Kong and Japan. But many more turned to PC games instead.
PC gaming took over the majority of the market. The following year, it grew to a US$100 million industry.
By 2015, PC games made up almost two-thirds of the market. Games you can play through a browser accounted for another 15 per cent. Mobile games, still small back then, took another 14 percent. Console games was almost negligible.
It doesn't mean console makers quit the market entirely. The law banned home consoles, but it didn’t specify what constitutes a home console.
Nintendo famously founded a joint venture called iQue with a local Chinese company. While the console ban thwarted Western companies such as Microsoft and Sony from distributing their products in China, Nintendo managed to sell devices by branding them as handheld or plug-n-play systems, carrying names like iQue GBA, iQue DSi and iQue 3DS XL. But the most well-known of them was the plug-and-play system iQue Player. It was effectively an N64 -- but the entire console was disguised as a controller, able to be hooked up directly to the TV to play games.
Other companies like Sega opted to port their console games onto the Windows platform. It partnered with Chinese company Matrix Interactive to release a number of Sonic the Hedgehog titles on PC, exclusively in China.
With the console ban in full effect for 15 years, Chinese gamers’ consumer habits and behaviors took a dramatically different turn from those in the West. Rather than going to friends’ homes to play games and socialize, Chinese gamers became more used to going to so-called internet cafes where people paid by the hour to access gaming computers.
That had a profound impact on how Chinese consumers perceived how games should be priced. Since they gamed on rented PCs, there was no point in purchasing games. What made more sense for many Chinese gamers was to buy stuff in the game after they logged in with their accounts. Hence, free-to-play and pay-to-win games became more accepted in the country.
When the ban was finally lifted in 2015, companies like Sony and Microsoft started to sell legal versions of their consoles, at first only in the free-trade zone in Shanghai, and later elsewhere across the country too.
However, these companies still face an uphill battle in growing their gaming business. Unlike in the West where these consoles have thousands of games to offer, Sony and Microsoft’s online shops are heavily censored in China. There are now fewer than 200 games available on PlayStation 4 in China.
That's why although more Chinese gamers are getting back into consoles, many still prefer purchasing devices released in Hong Kong or Japan, which offer a far greater variety of games.