Some gamers are so upset about it that they're reporting Steam to the CCP for listing Taiwan as a separate country. Seems pointless, but I guess they just want to watch the world burn, which is funny considering they're upset because they can't play a friendly game about being a good neighbor.

Must make it tempting to have limited communication systems, like Magic the Gathering: Arena, where players can only choose from a handful of benign emotes.

There seems to a weird trend of attaching political references to video game characters / other in game things which makes it even harder to block all forms of protest.

I feel that there is no reliable sources reporting on this, only a few vague statements laden with hyperbole.

Also till recently gaming consoles themselves weren't available in China as well.

Checking it again it looks like you might be right. This isn’t 100% confirmed yet. Last I’ve read is that it was a bill that has been tabled. I’d also prefer an additional source to confirm this is happening... not that it would surprise me, or that if it was true proper sources may still be hard to come by until some western companies get forced to do it.