Are China's Days of Cockblocking Console Makers Numbered?

Game consoles are made in China. But they cannot be legally sold in China. Game consoles are banned. This year, Lenovo is launching a game console in China. Funny, that.

The iSec, previously called eBox, is slated for a September or October release. The console, which features Kinect-style controls, was supposed to be out earlier this year, but was delayed.

The actual Chinese law refers to a ban on "game boxes", China-based attorney Greg Pilarowski told Kotaku. This conceivably could mean that arcade games, which are operated throughout the country, are also illegal in China. The decade-old ban seems to have its roots in online gaming, which was taking off in China at the turn of the century.

Online gaming is now big business in China.

Home console gaming is big business, too, but it exists in the gray market—a very open gray market. Chinese gamers have no problem walking down the street and buying a Wii, Xbox 360, or PS3. It's the hardware companies that are getting screwed over, with the big three hoping that China will end its ban. It might, but the iSec could get a headstart.

"Somehow they're getting away with this where the other console companies are not," Lisa Cosmas Hanson of game consultants Niko Partners told Reuters. "Let's say you're touting this product as a competitor to the Kinect, then why doesn't Kinect qualify?"

The company behind iSec, Eedoo, touts its game console as a home entertainment device, thus skating around the ban. Sony and Microsoft could make a similar argument.

"The government doesn't want to bring a case against China about this because there's no industry support."

Pilarowski told Kotaku that there is grounds for Sony, Nintendo, and Microsoft to contest the fairness of iSec's sale with the World Trade Organization. If home console makers did support governmental trade organizations like the U.S.T.R. to contest the ban, Pilarowski said it would be a "slam dunk" victory.

According to Pilarowski, allowing the iSec to go on sale while banning other consoles is "in flagrant violation of the WTO."

"The government doesn't want to bring a case against China about this because there's no industry support," said Pilarowski. No support means no case.

Nintendo is already entrenched in China with its plug-and-play iQue game machine, which is legal. It goes deeper than that. Nintendo, Sony, and Microsoft all manufacture their game hardware in China, which is a large untapped gaming market in the world's second largest economy. So China makes the machines and has millions of potential customers—hence game console companies' reluctance to push the Chinese government.

Both Microsoft and Sony expressed optimism to Reuters about China lifting its console ban. That might happen when the iSec goes on sale. It might not—especially if Eedoo is already saying iSec isn't a game console.

"The Chinese government ultimately needs to make the decisions," Sony Computer Entertainment exec Kazuo Hirai told Reuters. "We can't force it." No, but you can protest.

(Top photo: ChinaFotoPress | Getty)