Brazilian gaming platforms

Anderson Gracias, director of Sony in Brazil, announced that the console would start to be manufactured in the country.

In July 2015, Sony corporation announced that the second country in the world where its successful game console Playstation 4 will initiate manufacturing would be Brazil. The announcement took place during the same year in which another giant in the gaming sector, Nintendo, declared that their products would no longer be officially distributed in the country and Brazilian consumers would have to rely on the import of the company’s consoles and games.

This news is closely related to two characteristics of the gaming landscape in Brazil. The country’s market has grown immensely over the last few years, to the point of becoming one of the world’s major gaming consumer territories and to pay off the investment in local manufacturing. Yet, its burdening taxation system and other cultural traits still make it a hard task for global giants to firmly establish their products.

With a rapidly growing consumer base, the heavy investment from the world’s leading game publishers and console manufacturers seems like a wise bet, as the traditional hurdles faced by this sector are gradually being overcome. More than ever, Brazilians are displaying their will to consume gaming products, and, to companies in this segment, there is no factor more relevant than this.

Gaming Culture in Brazil, Piracy and Current Scenario

Brazilians have been into gaming for quite some time, even though several generations of gaming products have never been officially distributed in the country. Gaming products were only officially allowed to be imported to Brazil during the 1990’s, and prior to that, consumers relied upon illegal imports and counterfeiting, which were some of the main causes for the growth of the grey market that exists to this day.

Similarly to other product categories, gaming items were charged an extraordinarily high import tax in Brazil due to their superfluous nature. A few consoles that were manufactured locally earned remarkable success in Brazil, the main case of which was the Mega Drive, a national rendition of Sega’s Genesis console that was manufactured in the country through a partnership with local company Tec-Toy and lasted significantly longer in this market when compared to other global regions.

For the consoles that were imported, retail prices were astoundingly high and, as a result of the prohibitive costs, piracy increased exponentially and became a major issue for manufacturers. In the generations of gaming software distributed through CD and DVD-ROMs, mediums that were easily copied and bootlegged, the Brazilian market for gaming took a major hit. For several years, consumers were not willing to spend more than a handful of dollars on games, and bootleg copies were widely supplied by street sellers.

However, after the implementation of more effective measures to disable bootlegging in recent generations of consoles, some manufacturers were treated to an unexpected and somewhat positive effect of piracy. Brazilians that did not pay full price for gaming products still developed an affinity for console brands, which resulted in the development of a strong gaming culture in the country, just as sizable as that of consumers in other regions in the world.

When the prices of official products began to fall, due to local manufacturing and agreements with the Brazilian government to reduce the taxation for this product category, Brazilian gamers flocked to the purchase of consoles and gaming products. Another factor directly related to the recent increase in sales of gaming products in Brazil is related to the country’s economic boom. The Brazilian middle class, perhaps the main consumers of pirated gaming products in past decades, increased their purchasing power significantly during the 2000’s, and remained just as interested in the consumption of games, official or otherwise, as the years went on.

To put the size and potential of this consumer base in numbers, over the last five years the market for gaming in Brazil expanded at rates close to 30% and is currently the largest in Latin America. According to research by eMarketer, the revenue for digital purchases of games alone represented USD 1.49 billion in 2014.

Counterfeit games are easily found in the streets of large cities throughout Brazil.

Mobile Devices and Most Popular Platforms for Gaming

Sales of gaming consoles and compatible software are higher than ever before in Brazil. The current mainstream consoles, Sony’s Playstation 4 and Microsoft’s Xbox One contributed to an increase of 33% in sales revenue for consoles in the country during 2014, according to research by GFK. PC games are also experiencing a surge in sales, as digital product marketplace Steam revealed in 2013 Brazil was the country with the second highest increase in purchase volume during that year.

Aside from the traditional gaming platforms, new mediums such as mobile devices have managed to capture the attention of Brazilian players in recent years. The massive increase in sales of these devices allowed for an entire generation of Brazilian gamers to have access to affordable, bite-sized and mobile experiences and are now some of the most predominant formats of gaming in the country.

According to a survey from 2015 by developer Sioux and market research company Blend, 82.8% of Brazilian gamers play on smartphones, while 37.4% play on tablets. The mobile gaming market presents substantial opportunities in Brazil, as research by companies Newzoo and OneSky predict that revenues for this segment will reach USD 296 million in 2015.

 

Innovation Norway is responsible for promoting the Norwegian industry abroad. Our office in Rio de Janeiro manages Innovation House Rio, our business incubator office, and helps Norwegian companies in their efforts towards the Brazilian market.

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