Game consoles have been banned in China since 2000, due to what Chinese cultural ministers called "potential harm to the physical and mental development of the young." But an unnamed source from the ministry of culture has now told China Daily they are reviewing that policy, potentially opening the Chinese market to game consoles officially.

"Since the ban was issued by seven ministries more than a decade ago, we will need approval from all parties to lift it," the source said.

The stock market reacted quickly to the mere hint that console makers might get access to China's more than one billion consumers. Nintendo is up about four percent and Sony Corporation has seen a nine percent gain on the Tokyo Stock Exchange. Xbox maker Microsoft is largely unchanged in NASDAQ trading.

Despite the ban, many retailers and wholesalers have illegally imported legitimate consoles into China over the past decade. Console makers have found loopholes to get their products into the Chinese market as well. In 2003, Nintendo went through a local partner company to release the iQue, a controller-shaped device that plugged directly into the TV and played several downloadable Nintendo 64 games. The Nintendo DS has been available in the country as the "iQue DS" since 2005.

Sony released the PlayStation 2 in China in 2004 (after convincing the Japanese government that it wouldn't be used for missile guidance systems) but quickly withdrew the system after widespread piracy prevented the profit-generating game sales. Last November, Sony obtained a "Compulsory Certificate" to sell the PS3 in China through 2016, another hint that the anti-console policy may be weakening. Microsoft sells the Kinect in China, but mainly for use in scientific and medical research, not as a game controller.

The ban on game consoles hasn't dampened China's enthusiasm for gaming on PCs, especially in massively multiplayer online games. There are an estimated 100 million Chinese gamers online. In fact, as of late 2011, the 3.2 million Chinese World of Warcraft players outnumbered the roughly 3 million playing in North America.

But this trend also hasn't gone unnoticed by Chinese authorities. Since 2007, Chinese players have had to use a real name and ID number to sign into online games, and game makers have to limit the number of consecutive hours a player can play to combat fears of addiction. In 2008, the government-controlled Beijing Times reported that four million Chinese gamers had an "unhealthy" addiction to online titles.

If and when the Chinese government officially welcomes all game consoles, hardware and software makers will still face unique challenges in the market. Besides the widespread piracy that brought down the PS2 in China, game makers will also have to contend with the kind of bootleg games that have traded on the good name of well-known brands since the NES days. China also routinely places restrictions on the influence of foreign companies and international game servers, though Microsoft skirted these rules by launching a Chinese-language Xbox Live landing page in August.