The big news, recently, is that China may be lifting its ban on consoles. As a result, some stock prices have been shooting up. But why? What effect could China have on the videogame market? And who stands to profit the most from it all? Well, let's break things down, shall we?
First of all, China is big. Huge. Gigantic. That's pretty much the main reason that this is significant. If 1% of all Chinese bought a console, that console would be the most profitable automatically. But sheer numbers alone won't do the trick. What about demographics?
Well, to start, due to China's efforts to curtail population growth, most of the population is in the 15-64 age rank. This initially sounds bad for child friendly consoles, like Nintendo, but remember, this also means the Young Adult demographic is low as well. The main 'meat' of the Chinese population is in the very middle, the 30-50 year olds, who, in this country, represent the 'casual' demographic. In addition, due to the mostly banned nature of consoles here beforehand, many of these people are not too familiar with games in general, and would be looking for a more casual start. Advantage: Nintendo.
However, it's not like they have never experienced videogames before; China maintains a strong PC gaming following to this day. On one hand, Sony and Microsoft's consoles might appeal more to these people, seeing as how it would be similar to what they know; on the other hand, they already have PCs, and would not likely see these new consoles as a big step forward. Up in the air on that one.
Now, let's get to a problem that has plagued many countries for years: censorship. This is, of course, what they're lightening up on right now, but if Australia has shown us anything, it's that governments never really give up on censoring. This, too, would seem to work in Nintendo's favor, due to their family friendly library. I'm not saying that Sony or Microsoft would be outright barred from entering the country, but when China starts banning games, they won't start with Super Monkey Ball, if you catch my drift.
Another big contributor is price. China is notorious for its low income, so a cheaper console would naturally get more widely purchased. $300, $400, $500. Need I say more?
(Side note: The handheld market, in this case, would not be particularly affected. Consoles are a luxury, but handhelds are even more so. I doubt that an average Chinese citizen, after purchasing a $300 gaming machine, would shell out another $200 for the privilege of playing games on his bicycle.)
Finally, we have cultural differences. This might be the biggest factor in all of this. Chinese will adapt much more easily to a company that reflects their national traditions. This has been abated, somewhat, in recent years, due to globalization, but in a new market like consoles, it would still be reasonable to assume that a culturally out-of-place console would struggle more. Microsoft will obviously have a hard time with this, as they are very much a Western company, but I think Sony might actually have more of a problem with this. Their recent hits have been largely western, with companies like Naughty Dog and Quantic Dream taking home the gold, and they don't seem fully prepared to adapt to a new market. Nintendo, meanwhile, has remained culturally ambivalent through all this, their Miis representing a broad, open-hearted embrace to all races and cultures. I think they'll be just fine.]
So, yeah, that's why Nintendo's stock just went through the roof. But that's just my opinion. What do you all think?
P.S. If there are any Chinese people reading this, please feel free to point out my misgivings about Chinese culture.
First of all, China is big. Huge. Gigantic. That's pretty much the main reason that this is significant. If 1% of all Chinese bought a console, that console would be the most profitable automatically. But sheer numbers alone won't do the trick. What about demographics?
Well, to start, due to China's efforts to curtail population growth, most of the population is in the 15-64 age rank. This initially sounds bad for child friendly consoles, like Nintendo, but remember, this also means the Young Adult demographic is low as well. The main 'meat' of the Chinese population is in the very middle, the 30-50 year olds, who, in this country, represent the 'casual' demographic. In addition, due to the mostly banned nature of consoles here beforehand, many of these people are not too familiar with games in general, and would be looking for a more casual start. Advantage: Nintendo.
However, it's not like they have never experienced videogames before; China maintains a strong PC gaming following to this day. On one hand, Sony and Microsoft's consoles might appeal more to these people, seeing as how it would be similar to what they know; on the other hand, they already have PCs, and would not likely see these new consoles as a big step forward. Up in the air on that one.
Now, let's get to a problem that has plagued many countries for years: censorship. This is, of course, what they're lightening up on right now, but if Australia has shown us anything, it's that governments never really give up on censoring. This, too, would seem to work in Nintendo's favor, due to their family friendly library. I'm not saying that Sony or Microsoft would be outright barred from entering the country, but when China starts banning games, they won't start with Super Monkey Ball, if you catch my drift.
Another big contributor is price. China is notorious for its low income, so a cheaper console would naturally get more widely purchased. $300, $400, $500. Need I say more?
(Side note: The handheld market, in this case, would not be particularly affected. Consoles are a luxury, but handhelds are even more so. I doubt that an average Chinese citizen, after purchasing a $300 gaming machine, would shell out another $200 for the privilege of playing games on his bicycle.)
Finally, we have cultural differences. This might be the biggest factor in all of this. Chinese will adapt much more easily to a company that reflects their national traditions. This has been abated, somewhat, in recent years, due to globalization, but in a new market like consoles, it would still be reasonable to assume that a culturally out-of-place console would struggle more. Microsoft will obviously have a hard time with this, as they are very much a Western company, but I think Sony might actually have more of a problem with this. Their recent hits have been largely western, with companies like Naughty Dog and Quantic Dream taking home the gold, and they don't seem fully prepared to adapt to a new market. Nintendo, meanwhile, has remained culturally ambivalent through all this, their Miis representing a broad, open-hearted embrace to all races and cultures. I think they'll be just fine.]
So, yeah, that's why Nintendo's stock just went through the roof. But that's just my opinion. What do you all think?
P.S. If there are any Chinese people reading this, please feel free to point out my misgivings about Chinese culture.
