Console Revolution

Console Revolution

Retailers in China brave punishment from the Ministry of Culture to bring games like Ico to their customers.

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Interesting article. This doesn't seem very different from the grey market for imported games and consoles that sprung up in Brazil some years ago. Of course, the reason is very different as it doesn't involve blatant government dictatorship - taxes are just too high, both for importing and manufacturing stuff - but the end result is the same, supply meeting demand. Even the police harassment is present, just for other reasons (tax evasion).

But apparently we're moving away from that situation faster than China, and pretty much for one of the factors the author mentioned in the last paragraph: there's a lot of money to be made in a legitimate market, both for the companies and the government. Piracy is also a huge issue, but there are also others (beyond the fact that smuggled games don't return a dime for the government, obviously). For example, customs and mail service recently had problems to cope with the sheer amount of imports to the country - not just games, but everything else. (That's what you get when you try to 'protect' local industries or jobs with too many taxes - past a certain point you're just delivering a slow, painful death to both.)

And the only way to prevent that is to encourage local manufacturing with competitive pricing, so we've seen a number of tax breaks to those companies that manage to establish production lines. Microsoft and Ubisoft are already manufacturing consoles/pressing discs in here, and with prices slashed from 24% to 33%, now there's no price advantage to getting their games on the grey market anymore. Government will probably make a killing in two or three years with legitimate sales growing exponentially. Let's see how everything develops.

Cool. I knew piracy was huge in China, but I didn't know that they'd flat-out banned console games.

It's also interesting to see that even in China - where people earn so much less than in, say, America - there are still enough people insisting on being honest customers to make a market for them. Makes me hate pirates even more, it does.

It would also explain why handhelds are really expensive, and I guess I should be playing it indoors...

fabiosooner:
Brazil

Very interesting response, fabiosooner. There seems to be a lot of parallels with what's going on in China. So much hardware is manufactured here only to be immediately exported, it'd be nice if similar initiatives could be implemented to build a local market in the PRC at a reasonable price point, although the political climate here makes this proposition a lot more complicated.

Unfortunately in China, when a legitimate market does exist, a lot of the items are overpriced as luxury items, for example computers and fashion. Apple's stuff is more expensive in China from official channels than what we pay even in the West, despite the dramatic income difference. Many of my Chinese friends buy their computers and phones from grey market sellers, with the majority of the product also smuggled from Hong Kong, and it's generally a lot cheaper than the marked price at the Apple store. It'd seem like a wasted opportunity if games went the same route, not to mention likely increasing piracy, but at least the grey market would persevere and savvy shoppers wouldn't be too burned by prices.

Mr Thin:
Cool. I knew piracy was huge in China, but I didn't know that they'd flat-out banned console games.

It's also interesting to see that even in China - where people earn so much less than in, say, America - there are still enough people insisting on being honest customers to make a market for them. Makes me hate pirates even more, it does.

Yeah there is a 'console' called the Sport Vii that was marketed and labeled as a home entertainment unit or something like that to bypass the console ban. It was a knock off of the Wii's concept but didn't actually pirate anything(that I know of)

There will always be a legit market because they know that piracy is bad, and the government DOES raid distribution and places that manufacture pirated materials(just not very often). So I think in their eyes they would rather be caught with confiscated materials(that you could probably pay you way out of trouble for cheap), then own and sell pirated materials(that would cost a heftier bribe).

So gulou east right? So ill have to check there tomorrow then:)

To be quite honest, i also didnt know that consoles are banned in china. I often see people playing games in the subway on their psps and never thought much of it, except for the fact that i never saw console games anywhere(like supermarkets etc.). i just assumed theres no profit in it, since theres so much piracy.

Also on the issue with the police: in fact they really just seem to be bullies rather than policemen.
For all i know there is hardly any respect for them amongst foreigners, since most of their threads are quite empty. And the people in beijing seem to consent with paying them every other month to keep them quiet. Just like a national mafia...statefounded.

My interest is sparked...are you searching for other people to report on stuff in china?:D

edit: also a friend just told me today, that taobao.com also sends stuff to europe...its so cheap it has top be illegal...wait. actually its not that cheap on current games...just checked KOF 13 and its still like 30€. So i have to go there personally anyway.

last edit now: okay so you can buy the arcade bootleg for windows 7 for about 30-40 cents(euro cents that is)

Wow, what an interesting insight in to China. I didn't know consoles were banned there. And it seems completely crazy that shops are so open about selling them in a country that is notorious for it's control of the media etc. But I recall not long ago that some company in China was making a console specifically for the Chinese market, which looked like it was using similar technology as the Kinect. If consoles are banned in China then what's that all about?

Heh, when I started reading this and he was naming absolute locations, my first thought was "What if some Chinese authority who isn't sensible gets hold of this article? You've just outlined exactly where to find these guys!"

It's kind of crazy to see that they just pay off the police, as it seems that everyone except the highest authority realizes that there's just no point to this ban, it's just an opportunity to exploit people.

Although, I'm willing to consider that there's also so many other problems that they can't be bothered to deal with such a trivial (with respect to government policy) aspect of the law.

Wow, excellent piece. I miss this kind of articles on The Escapist, it's what brought me here in the first place. Kudos! Nad keep them coming. It's a fascinating insight into a marketplace dynamic I had no idea existed.

An entertaining read and a bold piece of journalism too, considering this activity could have gotten gcf in a bit of trouble with the authorities.
Good stuff.

As someone who's been to mainland China (specifically Shenzhen, right across the border from Hong Kong), I can corroborate this. There are many gaming shops and stalls in the market areas that proudly, yet discretely, promote there products. Many of the games, especially cartridge-based games like those for the DS, are sold without packaging. There are posters that display video game stuff, but the games are somewhat often kept out of sight.

My usual video game shopping experience in China circa Summer 2007:

-I'm walking through a marketplace-styled building.
-I see a sign that displays various video game logos and characters, but I don't see any video games in the glass cabinets.
-I approach the merchant, who usually doesn't speak English, pull my Game Boy Advance SP out of my pocket and point at the cartridge in it.
-He reaches below the counter and pulls out a cardboard box full of GBA games.
-I go through the box and he is not at all surprised that I want to test them before I buy any.
-Some of them look legit, some are obviously bootlegged, some are the English versions, some are Japanese.

I came home with a copy of Final Fantasy VI Advance and The Legend of Zelda: the Minish Cap. Minish Cap played perfectly fine, but it wouldn't save my game. I looked at it closer and saw that the Minish Cap sticker had been laid over the original sticker. Somebody blanked out the cartridge and bootlegged copied The Minish Cap onto it. FFVIA worked just fine.

It's a very interesting market.

I kinda' understand why piracy is so high in China now... Everything is illegal, so are their definitions of piracy squewed?

Wow. This certainly is an interesting thing to hear about. I'm like many people here who wasn't aware of the console ban in China, and it's nice to get some insight of how the gaming industry thrives in China.

Definitely interesting to hear about the economics behind how games work in China. This was probably one of the better Escapist articles I've read in quite a while.

veloper:
An entertaining read and a bold piece of journalism too, considering this activity could have gotten gcf in a bit of trouble with the authorities.
Good stuff.

Not me personally, but the store owner was certainly brave to be so open about his business.

Great article. Gave me a whle new perspective on Chinese gaming. Good to hear that the store owners are just as passionate as us escapists.

I feel that you are somewhat overstating the seriousness of the situation, and consequently giving your readers an inaccurate impression. I'd go as far as to call your article a misrepresentation, were I more acquainted with your own specific personal experiences.

Yes, the ban is a reality, but adherence to it is practically non-existent. And the "government crackdowns" amount to a certain authority covertly releasing the information that an inspection will take place on a specific date, upon which the shops close for that particular day. That's it. Some officers get some "small envelopes", and then it's back to business as usual. It's not even really close to a "grey market", as these shops operate in broad daylight, right out in the open. I'm talking about actual stores, not the converted residences to which you refer.

My supplier here operates a double-story shop in a major retail district. The upper floor of this shop houses about 30 different (PS3 and 360) consoles attached to individual televisions. It's a huge, widely known establishment that is incredibly lucrative for the owner. All of the students and gamers hang out and purchase their gaming stuff there. I'm talking about young kids, walking around with PSP's, or a kid from one of the wealthier families taking a PS3 SLIM home- walking right down the main street of the CBD holding it in his hands.

About three years ago, I asked my supplier about the legality and risk of his outlet, and he just laughed: (translation follows)

"As with most small matters, it's about who you know...but really, there are so many other bigger things for authorities to focus on. We're not really considered a threat, and are pretty much left alone."

After more than 12 years in the province of Chongqing, I have never fallen afoul of this particular ban. I have literally taken consoles and games into and out of China- I do this with games at least once a year, as I enjoy getting to Hong Kong for a bit of shopping. I have had customs officers not even look twice at these games or consoles as they check my luggage for more dangerous articles.

In summary, your article is interesting, but I also feel that it is an exaggeration. The actual situation is far less serious than you would have your readers believe. Whether this piece is an example of sensationalism, or just experiential subjectivity, is another question altogether.

Dr.Panties:
~

I appreciate your concern and feedback because it allows me to elaborate on some things in the article. You've written a very thoughtful response but I feel like you may have misinterpreted the piece a bit. The intention of the article was not to sensationalise an issue at all, but rather point out the huge demand for a legitimate market, and how in the absence of one, people have found their own solutions.

First, let's define grey market. A grey market is unofficial and unregulated distribution of legal products. Considering the games are illegal in China, 'black market' would be more appropriate but I chose to avoid such a dramatic term that's loaded with negative connotations. I feel like in the context of China 'black market' would give readers the wrong impression.

I clearly stated in the article that I myself was completely unaware of the ban initially because of how open and available these businesses are. ("When I first learned of the console ban, I was surprised by how obvious some of the stores were; with games lining the windows and gaming icons like Solid Snake and Mario splashed across their signs.") I originally believed that it was the companies such as Sony or Nintendo who didn't want to sell here, perhaps due to piracy concerns. I have never seen a store like you described, however. I've lived in both Beijing and Shanghai, as well as travelled extensively to other cities and the stores I've seen have all been pretty modest affairs, most of them being stalls within larger markets. The owners all told me they used to make a lot of money, but not really now.

Nowhere have I said that people will be punished in the street for walking around with games, or even tried to imply it. Quite the opposite in fact, by repeatedly stating how popular games are in China and how huge the market is, not to mention all the busy customers referred to in the article. Personally, I arrived in China with a Wii and a DS. I've flown in and out with a PSP many times. I have also Fedexed the odd game through from Play-Asia, which always goes through customs. China isn't concerned with personal use electronics. They are concerned with sales. The owners and dealers in this piece aren't bringing in one or two items. They're bringing in copious amounts of sealed and boxed product, and avoiding taxes to boot. The Ministry of Culture set the law and left it unregulated. My point is that it's ridiculous, it hasn't stopped anything, and they may as well open their doors to a legitimate market. All it has done is increase piracy, and left corrupt policemen with some extra revenue to exploit.

In regard to the police, here is the verbatim quote from the published article:

"Many stores have been raided but I have been lucky so far. If I hear that there will be raids in the area, I close my store for the day." Police often use the threat of raids to bully bribes out of storeowners and Gu tells me he has often had to pay police off in the past. "***They're not really concerned with the ban; it's a low priority*** but it is also an ***opportunity for them to make money.***"



Other owners were interviewed and said similar things, however in the context and size constraints of the article it made sense to just use one quote.

It might also be worth pointing out that Beijing is a lot more heavily regulated than the 2nd and 3rd tier cities within China as it's the capital. Shanghai also experienced a lot of cleaning up prior to and during the World Expo. You cannot have lived here 12 years and not seen how entrenched corruption is in China. Chongqing would have a lot more relaxed attitude toward these sorts of issues I'm sure.

This issue is a lot bigger than my article's word limit. For every rule, there's going to be an exception, like your store in Chongqing. I feel like in introducing the issue to the wide audience that make up The Escapist's readership, I gave a pretty good, concise and unbiased account. All of my research and source articles were submitted to The Escapist to be independently verified. I hope I have alleviated your concerns, somewhat and I hope you understand my point. Perhaps if misinterpretations occur it just shows my limitations as a writer, but I never wanted to vilify China. Quite the opposite, I wanted to share it with a wider audience, show the similarities, the love of games and introduce the hypocrisy of the ban.

gcf:

Dr.Panties:
~

.

Thanks for your reply. You bring some good points to the discussion. Firstly, I would disagree that this is a "grey market". The ban exists merely at "face value" (as a long term resident, I'm sure you would understand this pun). How can it even be considered a ban if the focus is only on sales, but "personal use" electronics get a free pass? As you mentioned, the law was set, and then left unregulated. I would venture that it is more a case of "grey bureaucracy" than a grey market, as is the case with so many similar issues in this country. One point on which we definitely agree is that it's ridiculous.

And yes, as you mentioned, this syndrome is well and truly entrenched. It's a system. What perturbs me is whether this pseudo-ban was deliberately designed and implemented to be exactly what it has become- a pocket-lining facade, with the option to be strangled/utilised as another form of mass control. (Deeper issues, and somewhat off on a tangent). One thing I'll certainly acknowledge is that it would certainly be more regulated in Beijing than my current location, or somewhere like Chengdu for instance. However, this acknowledgement works both ways- by focusing only on Beijing, you offer a fairly limited insight into how the market operates at national level. Namely, the extent to which this "ban" is circumvented by the suppliers, tolerated by the authorities, and entirely ignored by the public.

Moving on to your points regarding punishment, I feel you might have slightly taken my comments out of context. I was simply illustrating the openness with which this market operates, not intimating anything about statements that you didn't actually make. And my issue isn't with any notion of vilification- rather, I was more concerned with the tonal implication of your piece. This concern is further exemplified by your comment upthread:
"Not me personally, but the store owner was certainly brave to be so open about his business."

No, actually he wasn't. If this were a real issue, if there had been any credible risk or threat whatsoever, this man would never have talked to you. You know this. You know how things work here, or at least you should. The options are: Fervent nationalism; silent acquiescence; underground mumblings; disappearances.

And that's the crux of my problem with this piece- the facts contradict the tone. What should be an interesting insight reads like an expose'of a non-issue.

Dr.Panties:

gcf:

Dr.Panties:
~

.

What perturbs me is whether this pseudo-ban was deliberately designed and implemented to be exactly what it has become- a pocket-lining facade, with the option to be strangled/utilised as another form of mass control. (Deeper issues, and somewhat off on a tangent).

I actually really like this line of thought, while it didn't occur to me, it makes a lot of sense, although I think the reality would be much more mundane. I believe it was more likely the ministry's 'set it and forget it' attitude toward handling the issue. Rather telling is their lack of foresight toward the online computer game market. In a bigger article it would definitely be something to explore, although you could conceivably write an entire dissertation on this whole issue and only just scrape the surface. It's tricky to summarise all the social, political and economic factors that contribute to the current situation of gaming in China.

Perhaps that's how the conflict of tone is entering the piece. It was very hard to convey the controlled chaos of China, the spotty and byzantine implementation of policy and the way it's enforced. On one hand I have to say 'it's a party over here, games for all' and on the other 'but this is illegal and their are complex factors behind it'.

Regarding my statement upthread about the man in the article, he thought the chance of this article landing in the hands of someone who would do anything about it was highly unlikely, and he wanted to see his name 'in print' (a portion of his business comes from overseas). The police wouldn't be able to read it and anyone with any real power is probably much too busy to concern themselves with it. If The Escapist was a major news source, the situation may be different as China often reacts strongly to criticism that causes a loss of face. So I suppose I misspoke, I should've said I respect his openness.

 

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