China's Ministry of Culture (MOC) refuted media reports that it would remove a ban on video game consoles when contacted by the Global Times on Tuesday, meaning major game companies Sony Corp and Nintendo Co may continue to struggle to open the door to China.
Media in China and abroad reported Monday that China was considering ending the ban on selling video game consoles, causing shares of Sony and Nintendo to rise by 9.07 percent and 3.56 percent respectively by Monday's close.
The ban was issued jointly in June 2000 by seven ministries including the MOC, in hopes of regulating the domestic gaming market and preventing teenagers from indulging in video games.
The culture watchdog told the Global Times Tuesday that the government has no intention of changing the policy.
"Thanks to the government's decision in 2000, the domestic online gaming industry is developing strongly and rapidly. And since 2001, the number of listed online game companies has reached 10," Xue Yongfeng, an industry analyst from Beijing-based Internet consulting firm Analysys International, told the Global Times Tuesday.
Analysys International predicted that total sales in China's online gaming market will reach 68.5 billion yuan ($11 billion) in 2013, up 23 percent from 2012, and reach 82.6 billion yuan by 2014 and 94.7 billion yuan by 2015.
Despite the booming online gaming industry and the government ban, large numbers of smuggled or counterfeited recreational machines can be found in China, especially Sony's PlayStation Portables (PSPs), said Cao Di, an industry analyst from iResearch.
He noted that the market share held by illegal consoles is hard to calculate due to scattered and secret selling channels.
Domestic consumers can easily buy PSPs, both authentic and counterfeit, from online shopping platforms like tmall.com, and find free pirated game software on the Internet.
A Tmall retailer told the Global Times on condition of anonymity that his shop prices PSPs at around 200 yuan, and can sell an average of 2,000 units every month.
Sony has always regarded China as a gaming market with potential, and has had some "constructive discussions" with Chinese supervisory authorities, according to a Bloomberg report Monday that cited Satoshi Fukuoka, a spokesman for the company's game unit.
However, the high sales of smuggled consoles mean that international game companies can't be sure of turning a profit in China, even if they can get permission to sell, noted Xue.
He said that large game companies like Sony and Nintendo earn most of their profits from their game software business and not from console sales, while Chinese gamers prefer free game software.
Besides, consoles like the PSP may gradually fade from the global market with the impact of the growing online gaming industry and newly emerging games for tablets such as the iPad, said Xue.