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Pixel P&L: India Removes Tax Breaks for Gaming Hardware, Physical Games

Pixel P&L: India Removes Tax Breaks for Gaming Hardware, Physical Games

AFK Gaming Editorial
February 03, 2026

Welcome to another Pixel P&L edition. This issue takes 5 minutes to read. If you only have one, here are the 5 most important things:

India ends customs duty breaks for video game components and physical media, effective April 1, 2026.
Chinese authorities shut down bato.to, the world's largest manga piracy network, following complaints from major Japanese publishers.
GTA 6 anxiety builds as fans expect a delay announcement during Take-Two's earnings report later today.
Netflix's FIFA game hires former eFootball's Fox Engine boss Julien Merceron as chief technology officer.
Blizzard quality assurance workers ratify union contracts at Microsoft, securing wage increases and AI usage regulations.

Let's get into it.

On Our Radar: India Ends Customs Duty Breaks for Video Game Components and Physical Game Media

India's Budget 2026-2027 removes customs duty exemptions for video game manufacturing components and physical game software, effective April 1, 2026. The changes affect two specific categories: parts used to manufacture video games and gaming software distributed on physical media like discs and cartridges.

The exemptions, previously listed under notification No. 45/2025-Customs, allowed game developers and publishers to import these items at concessional Basic Customs Duty (BCD) rates. Game studios importing development hardware, specialized components, or physical game copies for the Indian market benefited from lower import costs.

With the exemptions lapsing, studios may face higher costs when importing dev kits, specialized gaming hardware components, or manufacturing tools. Publishers distributing physical games (already a shrinking segment) will see increased import duties on boxed copies and console game discs.

The move comes as India's gaming industry debates the balance between protecting domestic manufacturing and supporting a sector that relies heavily on imported technology. Unlike countries with established hardware manufacturing ecosystems, India's gaming industry depends on imported components for everything from console development to PC gaming peripherals.

For consumers, the impact depends on how companies absorb or pass on the increased costs. Physical game collectors and console gamers buying imported titles could see price increases, though the shift to digital distribution may limit the broader market effect.

Chinese Authorities Shut Down World's Largest Manga Piracy Network

Chinese police closed bato.to and related sites following a complaint from five major Japanese publishers, including Kadokawa, Kodansha, Shueisha, Shogakukan, and Square Enix.

A man in Guangxi, China, admitted to operating the network, which hosted thousands of illegally translated manga titles without authorization. The Japan Content Overseas Distribution Organisation assisted in the investigation.

The suspect used multiple parallel sites to distribute traffic and avoid enforcement actions across countries. Users uploaded pirated content to the platform, which the operator hosted and distributed globally.

He was released on bail pending formal indictment. Authorities continue investigating potential accomplices.

The publishers initiated the complaint through CODA, citing widespread copyright infringement. The network's shutdown represents one of the largest enforcement actions against manga piracy, though the specific charges and potential sentences remain unclear as the investigation proceeds.

⚡️Quick Bytes

GTA 6 Anxiety Builds Ahead of Take-Two Earnings

Rockstar's silence on Grand Theft Auto 6 has fans expecting another delay announcement during Take-Two's quarterly report that is expected to go live later today. Physical editions may slip to 2027 to prevent retailer leaks, though digital releases would proceed as planned. A PC version remains unconfirmed. Industry watchers expect console versions first, with PC potentially delayed until 2027 or later, following Rockstar's pattern with previous titles.

Netflix FIFA Game Hires Former eFootball’s Fox Engine Boss

Julien Merceron, former worldwide technology director at Konami who worked on the Pro Evolution Soccer series, joined Delphi Interactive as chief technology officer for Netflix's FIFA-branded game. Merceron previously held senior positions at Bandai Namco, Square Enix, Ubisoft and IO Interactive. He led development of Konami's game engine used in Pro Evolution Soccer from 2013 to 2020. Delphi is developing FIFA games after EA Sports lost the license. The streaming game launches in summer 2026 for the World Cup.

Blizzard Quality Assurance Workers Ratify Union Contract at Microsoft

Over 60 quality assurance workers at Blizzard's Albany and Austin studios ratified a three-year union contract with Microsoft, the Communications Workers of America announced. The agreement, which began negotiations in May 2023, guarantees wage increases, AI usage regulations, fair game credits, disability accommodations, and restrictions on mandatory overtime. It marks Microsoft's third union contract after agreements with ZeniMax and Raven Software employees. Workers cited increased job security and layoff protections with recall rights as key contract provisions.

⚔️Side Quest

🤣Laugh:

📺 Watch: The Game Business examines whether GDC faces a make-or-break moment as it pivots to a "Festival of Gaming" format. With 31% of international developers canceling US travel plans over immigration and policy concerns, GDC leadership discusses their strategy to save the industry's flagship event.

🎮 Play: Escape from Ever After delivers what Paper Mario fans have been craving: witty dialogue, clever mechanics, and actual heart. Yes, it borrows heavily, knockoff Tubba Blubba included, and some chapters spike difficulty awkwardly. But in an industry drowning in monetization schemes, this indie remembers games should be fun first.

📚 Read: PlayerXP’s report reveals how players actually respond to AI in live-service games. It analyzed 22,000+ interactions across Steam, Reddit, and YouTube to show which AI implementations succeed and which fail, and why. “While there are small pockets of curiosity and appreciation for the AI voiceover technology, the prevailing sentiment leans towards a general frustration and disappointment, as well as a desire for more immersive, higher-quality human voiceover.”

💡Did You Know

Sony filed a patent in February 2023 for a PlayStation controller with no physical buttons, just touchscreens. Made public in early 2026, the design allows players to customize button layouts and sizes across the screen. Prefer your D-pad on the right? Move it. Don't need a Triangle in a racing game? Remove it entirely.

The controller uses pressure and heat sensors to detect inputs and can recognize individual users, automatically loading their preferred configurations. Sony's patent argues fixed layouts don't accommodate different hand sizes or play styles.