According to the note, the impact would be limited by four factors.
- First, such a decision could take up to two years to finalize.
- Second, many Chinese gamers already purchase pirated copies of game software — making the software already widely available.
- Third, Chinese gamers seem to prefer the social interaction of Massively Multiplayer Online (MMO) games rather than consoles.
- Lastly, language barriers could prove detrimental to distributors.
However, despite Chinese gamers' preference for MMO games, the rule change could put pressure on the revenues of Chinese MMO companies, said Barclays.
"User dilution/distraction away to console and mobile may continue to weigh on investors' concerns about the longer-term growth trajectory of the traditional MMO market," read the note.
(Read More: China Spin Doctors Have a New Tool — Combat Video Games)
Nonetheless, other industry commentators viewed the news more positively. PJ McNealy, founder and CEO of Boston-based consultancy firm Digital World Research Centre, said Nintendo and Sony would benefit the most from the rule change long-term, despite the already prevalent gaming market in China.
"Nintendo and Sony stand best to benefit from such a change. The reality is that there might not be much software sold legally, but I'm certain both Sony and Nintendo would be happy to sell more hardware," he said.
However, McNealy pointed out that other developers could face challenges.
"In my opinion, Microsoft would have a hard time selling Xbox consoles in China. There is likely very little content on the Xbox today that would appeal to a Chinese audience, but this could change if there was a reasonable assumption of a developer being compensated properly."
(Slideshow: The Most Anticipated Video Games of 2013)
Separately, McNealy added that the removal of the ban on video gaming could provide a boost to the TV industry.
"The TV market is booming in China as the middle class expands, and China surpassed the United States in consumption of new TVs last year," McNealy said. "Consoles could help spur on utilization within China, which would benefit the TV upgrade cycle from cathode-ray tubes (CRTs), supporting all of the Chinese TV factories that are ramping up. It would be a win-win."
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