Chinese e-commerce platforms, including Alibaba's Taobao, are removing overseas versions of game consoles including the PS5, Xbox Series X/S, a move that is expected to significantly squeeze the viability of this gray market.
A large number of Taobao stores are removing overseas versions of next-gen consoles PS5 and Xbox Series X/S, including Hong Kong, Japanese, US, and European versions of the models, according to mydrivers.com.
The report cited unnamed Taobao merchants as saying that in addition to the PS5 and Xbox Series X/S overseas versions being removed, the Switch overseas version was also removed.
The reason behind this is that regulators are investigating stores selling non-Chinese versions of the Switch, asking them to stop selling all of Nintendo's overseas gaming electronics, the report said.
In addition to game consoles, the action also involves overseas versions of physical games, the report said, adding that it is highly likely that Chinese users will not be able to buy overseas game products and devices in the future.
In the Chinese market, the Switch is distributed by social media and gaming giant Tencent.
On March 24, Tencent's first disclosed sales figures for the Chinese version of the Switch showed that the device has sold more than 1 million units to date, with more than 10 games available.
The Chinese version of the Switch was launched in December 2019 and currently ranks first in the Chinese game console market in terms of market share.
Sales of the Chinese version of the Switch have now surpassed the total sales of the Chinese version of the PS4 + Chinese version of the Xbox One in the same time period, as reported by several Chinese media outlets.
However, it is worth noting that since the Chinese game market has not been fully open to foreign investors for a long time, a large number of users have been buying other countries' versions of game consoles through the gray market.
Despite the good sales results of the Chinese version of the Switch, the gray market seems to be more popular for such devices. But with the latest action, this unregulated market may shrink significantly.
Although the Taobao platform has removed overseas versions of the PS5 and Xbox Series X/S, there are still merchants selling them, just at higher prices than in the past, the above report said.
Previously Sony had announced that the PS5 China version will be on sale in April-June this year.