Yah, it totally makes sense.

doesnt need to disapear nor would i expect it to, majorly effected, yes.  It just makes them easier to find, better advertising, legal, and better priced(Not to mention chinese publishers will actually be publishing their games now).  Therefor more accessible to the general public which was my entire point.  

The point tho is that in China its not better priced. Grey Market will either match or be better priced. It's just as advertised in most cases since there are so many stores you can walk into off the street and buy it. It's not like you have to find some back alley dealer. The places are out in the open and everywhere. It's just as accessible if not more so.

Theyre already available to the general public, both online and in physical stores, not sure exactly what you think the situation is, but hell, next time i'm over in mainland china for work i'll gladly take some footage in random stores.

All the legal availability is going to do is make it even less of a risk to sell grey market stock, and make it much, much harder to monitor.

No, it most certainly is better priced for legal availability, that isn't up for debate, the tradeoff is that the games and console are both region locked, so releasing the games cheaper there has a reduced concern for said cheaper games being exported elsewhere.

If they didn't region lock the console and games then theres nothing stopping the grey market traders from restocking with the cheaper chinese versions.

Your first point was that the official games would match the grey market prices, because otherwise they would be taking a loss. Which they wouldn't do then it would drive up the prices of the grey market. So the grey market would increase their prices because theirs arn't  region locked. At least that was my perception of it. 

The current retailers selling grey market games are more than likely going to do that, but that does not mean their intended retail price isn't cheaper, it just means that those retailers will be marking them up
My point was never that the games wouldn't be cheaper than in the US, just that people expecting new retail games in the $16-40 bracket are highly likely to be dissapointed.

Retailers increasing the price of grey market games to compensate, is entirely my speculation, and may or may not happen, it depends entirely on how the market reacts to legal availability, and how the general public react to the region locking / inability to buy certain titles.

For example, it would not be that far fetched to see the prices of Battlefield and Ryse increase on the grey market in response to them not being legally available.

Why is tier 2 even on the chalkboard to begin with?

Ah the Chinese Rules and Regulations in action. If they made it region free I would actually be surprised.

Totally agree, just allowing to sell it there was a mission in itself.