Xbox One China Market Debut Could Be Met With Censorship Challenges

Microsoft’s Xbox One will go on sale in mainland China after a 14-year-old ban on gaming consoles was overturned on Sept 27. Gaining access to the Chinese market is a huge win for the Seattle-based company, but finding success among Chinese users may not come as easily as it did in other global markets.

While news of the release was met with approval among China's online gaming community, the new gaming console will likely face censorship of its gaming content.

Microsoft’s (NASDAQ: MSFT) newest version of the Xbox console, the Xbox One, will be sold in mainland China beginning in September with the help of a local tech partner. Xbox’s Corporate Vice President of Marketing, Strategy and Business, Yusuf Medi, said the gaming platform agreed to partner with Shanghai-based electronics manufacturer BesTV in a deal worth $237 million, which will bring the Xbox to the Chinese market for the first time.

China has a huge gaming community, which Microsoft says is more than a half-billion strong, or roughly a third of the country’s total population. However, China’s gaming industry is largely dominated by PC gamers and mobile game users. The introduction of the Xbox One will add a new vertical to the current gaming market, which is estimated to be worth more than $13 billion as of 2013.

Gaming consoles were banned by the central government in 2000 amid fears that it would affect the mental health of the country’s youth because of the mature and violent content that's often featured in video games. This ban effectively barred huge tech companies like Sony, Microsoft and Nintendo from gaining access to the lucrative Chinese gaming market. Xbox has called its China debut “monumental,” and it was made possible by an overturned ban that had been administered by the Ministry of Culture, which regulates consoles, Internet cafes, and video games. But related chatter on popular Chinese social media platforms suggests that users' concerns about state censorship or restrictions on video games have not gone away.

“Xbox sold in China is pretty cool, but I must ask, will they be selling all the games too?” one microblogger wrote when he reposted a local media report about the Xbox becoming available in China. “Console is one thing, but what about freedom to buy games?” another wrote.

“This is a big deal in terms of what it means for opening of the gaming market ... if it does actually open up,” another microblogger wrote.

Although the ban was overturned, the Xbox's success in China is anything but assured. Many of China’s current Xbox users get bootleg games from local illegal markets, and console-specific games, like many of those made for the Xbox, face an uphill battle against PC and mobile games, which are very popular in China.

Getting the console into the country is one hurdle that Microsoft has cleared, but Xbox and BesTV will encounter others if they're to succeed in China. First, they'll need to build a console-gaming culture in China that isn’t nearly as popular as the PC gaming-culture is there, and second, the Chinese government may censor many of the games that are made for the Xbox.

Unlike PC or mobile games, selling Xbox games will require video game makers to design games for a relatively localized market, rather than the Xbox's current roster of games, which are made almost entirely for Western markets. In the U.S., a game rating system exists to categorize content for age suitability, a structure that certainly does not exist in China. Each game that will be sold in the Chinese market will likely have to go through the same vetting process that foreign films have to undergo, including checks for sensitive content, including extreme violence or nudity, by censors.