Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
April 24, 2014
arrowPress Releases
April 24, 2014
PR Newswire
View All





If you enjoy reading this site, you might also want to check out these UBM TechWeb sites:


Analysis: Inside Brazil's Video Game Ecosystem
Analysis: Inside Brazil's Video Game Ecosystem Exclusive
January 20, 2010 | By James Portnow

January 20, 2010 | By James Portnow
Comments
    60 comments
More: Console/PC, Exclusive



[Brazil's game development market is underdeveloped, but Divide By Zero CEO James Portnow believes it has "infinite possibility." In this detailed regional analysis, he explains why.]

Recently, an unusual opportunity came across my desk. It required that I do some business in Brazil. I knew nothing of the Brazilian games industry, so I began to ask around. To my surprise, no one else seemed to know much about either, so I just took the leap and headed south.

Beyond my business dealings, I tried to do as much general fact finding as possible while there. Here’s what I learned.

Overview

Brazil is a place of infinite possibility. It has the drive, the wealth, and a large enough highly educated populace to become the next Korea. It has a large, well established "gamer" demographic and a remarkable desire to grow its own national industry. It is also unfettered by the traditions and mindset that many of the more established markets have developed.

I believe there are great opportunities for members of the US game industry in Brazil, but there are also great obstacles. Piracy is rampant, the industry is inexperienced, funding is almost nonexistent, distribution is next to impossible, and the government is either apathetic or hostile. It’s a risky place. My money says there will either be a boom in the next decade or the industry in Brazil will never start.

I’ll try to go over in depth what I see as the challenges facing the industry in Brazil, the possibilities on the horizon, and what we, the international development community, can do to help the Brazilian industry overcome the hurdles they face -- and how we benefit by doing so.

Hurdles

First, the elephant in the room...

Piracy in Brazil

I’ve long heard other people in the industry say Brazil simply isn't a viable market for games because of the piracy rate. This isn't true. It’s not a viable market for games because of the tax rate.

Games which are six months old in the US are being sold through legitimate vendors at 250 reais, or around $140 US dollars. This is an exorbitant price. It’s prohibitive. If you’re reading this article, you're probably pretty into games and know many people who are. Think about yourself and your friends. How many games would you purchase per year at $140? One, maybe two? Would you buy a console in the first place if you knew that every game you were going to buy was $140? All the consoles I saw in Brazil were sold at roughly one and a half to two times their price in the United States as well.

What if I then told you that you couldn't get on Xbox Live in Brazil? Would you buy an Xbox 360?

Even the very wealthy Brazilians with whom I spoke bought the majority of their legitimate games through Steam or other digital distribution services. For console games, Play Asia is by far the most popular choice (Amazon won’t even ship most games to Brazil), followed by Submarino.com (which still has exorbitant prices but occasionally has good sales), with the local retail outlets being a distant third.

The sad fact about all this is that the retail outlets seem almost exclusively to cater to parents who don't know where else to go. That's anecdotal evidence, but after spending several hours loitering in major retail game stores in several different states, it seemed universally to be the case.

All this isn’t to say piracy isn't an issue. Pirate stores sell games at 5-15 reais ($2.80-$8.50) and have better service. For the most part, pirate game dealerships are small local operations that know their clientele and are willing to go further for their customers than the large retail chains. Interestingly enough, I heard people say that their pirate dealers would let them buy a game and, if they didn't like it, come back a few days later and switch it for something else. That's the sort of service I wish we had in the US.

Regardless of the extra service, people seemed interested in legitimate versions of games so long as they came at a reasonable price. In general people told me they’d be willing pay $20 to $30 more for a legitimate game over the pirated version. That number went up to approximately $40 if the game had internet play and required a legitimate version of the game to play online.

If anyone has sales figures of PlayStation 3 games in Brazil, I’d like to know. PS3 games are currently un-piratable due to the Blue Ray discs.

Academia in Brazil

In the field of research, Brazilian academics far outstrip current US efforts, at least with respect to the cultural and artistic merits of games. There is a disproportional number of government grants and university-sponsored research positions available to those who wish to explore the sociological and historical aspects of our medium.

Unfortunately, in terms of educating future developers to be prepared for the rigors of a career in the industry, Brazilian schools are woefully behind US standards (with the possible exception of a program being set up by Ubisoft in southern Brazil).

Universities across Brazil are currently making a concerted effort to offer game development as part of the potential coursework for students. Unfortunately these nascent programs have met with little success. Given the level of passion and determination I saw in the teachers and the students, I believe these programs will grow and perhaps become the backbone of the Brazilian games industry. But right now, they face challenges unthinkable in the United States.

Brazilian professors have an incredible opportunity -- their game development programs have the chance to grow alongside the private sector aspect of the industry and thus be considered a vital part of the industry as a whole, as opposed to in the United States, where university efforts aren’t well integrated into the larger machinery of the industry. Unfortunately, this opportunity brings with it a monumental challenge: building development classes without a strong local development community.

Schools in Brazil do not have the existing industry from which to draw resources. They do not receive technology from game companies, they don't have internships available to their students, and, perhaps most importantly, they don’t have the opportunity to draw on the experience and talent of the industry to provide teachers and lecturers.

Additionally, interdepartmental cooperation in Brazil seems to be an even bigger hurdle in Brazil than in the United States. In many of the schools I visited, the game development courses were the purview of specific departments. (The split is fairly even between schools that had game development courses run by an art department and those run by the computer science division. Humorously enough, I ran into several programs that were essentially part of the fashion design track.) This means students rarely get to work in interdisciplinary groups, and we all know game development simply can't be taught in a useful manner without exposing students to the diverse specialties that go into game creation.

On top of these underlying challenges, many of these programs lack the resources and infrastructure vital to a successful game development degree. They lack commercial software, modern hardware and even, at times, proper lab and classroom space. If anyone reading this is interested in donating software or hardware to some of these Brazilian programs, feel free to contact me.

Oi Futuro Nave

There was one particular school I came across during my trip, a high school called Oi Futuro Nave. In it I saw the future.

Oi Futuro Nave may be the boldest educational experiment I've ever encountered. It is the child of a partnership between one of Brazil's largest cell phone carriers, Oi, and the government of Rio de Janeiro. The goal of their experiment is nothing short of preparing students for the technological culture of the future.

Every classroom in Oi Futuro Nave is equipped with the latest technology, from digital white boards to modern computers. Even the building is a reminder of and a monument to technology, for Oi Futuro Nave occupies part of one of Oi’s central switching stations. Students can see the massive banks of cables that keep their neighborhood connected through the windows in the cafeteria's walls.

The students specialize in animation, script writing, or game programming. They work in multidisciplinary teams to create projects that incorporate each of these specialties. They spend long days, usually from 8am to 5pm (most Brazilian public high schools have a truncated school day of only four to five hours), working both on these projects and learning all traditional subjects.

It's a young school, having been around only three years, so it has yet to see a class graduate. When the first class enters college, the metrics they return in higher education will say a great deal about the success of the experiment, but so far what I saw there seemed like a testament to the power of technology and education.

Oi Futuro Nave is a public school. This means none of the students pay to go there and they all come from the public school system, which is otherwise notoriously awful. The engagement I saw from students who would may otherwise have simply checked out proves to me its success. Its value comes from the fact that, while the setup costs for the school exceeded other schools of its size, the year to year operating costs (as I understood it) are competitive with other schools of its size -- schools which offer a much worse education.

Oi Futuro Nave takes the mystery out modern technology for these kids, but it leaves the magic. This is the future of pedagogy.

Publishers

How do you finance a project in Brazil?

This question may present us with the biggest hurdle facing the Brazilian games industry. There are no major Brazilian publishers and none of the major Eastern or Western publishers have a large presence in Brazil, with the possible exception of Ubisoft. Venture capital for game development is even more difficult to acquire in Brazil than in the United States (I did not meet a single venture-backed developer, and all agreed that since the dot-com bubble, finding venture has been nearly impossible). Bank loans are equally difficult to get for Brazilian developers. All of the companies I encountered were either self-funded or backed by small private angels.

There is limited governmental support in the form of grants for edutainment games and simulations, which has lead to some growth in the serious games industry in Brazil, but there is little in the way of subsidies or matching funds available to traditional game developers.

Without financial support, many companies are reduced to relying on work for hire to stay in business. This means that their own projects drag on and rarely reach completion, which in turn hamstrings the growth of the Brazilian games industry.

Development

With the exception of Southlogic (the makers of Deer Hunter, recently acquired by Ubisoft) and perhaps Tendi Software (creators of TriLinea for Xbox Live Arcade Indie Games), most of the viable Brazilian industry is focused on smaller non-console titles. They have some incredibly strong mobile developers, including Gameloft and Glu Mobile, but -- much as in the United States -- the mobile game market is practically a separate industry to those creating experiences on any other platforms.

PC and console development in Brazil is in its nascent stages and the Brazilian games industry suffers from many of the problems that afflict the amateur and independent game development community in the United States. Primarily, they have no sense of scope (this is a gross generalization; there are plenty of exceptions, but not many that I encountered). Unlike in the US, where the industry had the luxury of growing up in the Atari era, when a game could be brought to completion by a single individual, game makers in Brazil expect to jump in and start making AAA experience like those they play. Given the funding and trained talent available in the Brazilian industry today, this is an impossibility.

The Brazilian industry is also plagued with too many people who want to be designers. The industry there hasn't coalesced enough yet to establish designer as a separate job. In many of the teams I encountered, most of the team members took part in the design (with perhaps a designated designer as the lead) and, while I believe everyone should have some input, this design by committee approach leads to massive amounts of scope creep and lack of a clear and unified vision. This is something the industry will mature beyond, but until it does, it will prevent the community from ever successfully developing larger products.

There is also something of a brain drain. The most talented and successful Brazilian developers tend to end up working in the US, which means that there aren't enough experienced leads available for beginning businesses. Many times I saw Brazilian developers reach outside the industry for their leads, looking to commercial software engineers and members of the advertisement industry, which uses a great deal of pre-rendered CG, for artists and developers.

On the positive side, wages are lower than in the US. Junior staff tended to receive roughly 20 percent of US wages, with more senior people (especially foreign employees) getting closer to parity with their US counterparts. Unfortunately for anyone hoping to set up a company there, it’s important to remember that you have to estimate wages to roughly double in total cost because of taxes and mandatory benefits.

Another difficulty facing the nascent Brazilian games market is the way the international community deals with Brazil. The few major multinational companies that have game development studios in Brazil seem to be focused on producing products for the international market rather than attempting to grow the national market. This is clearly the safer choice at this point, and may be the correct business decision, but it does curtail the growth of Brazil as a viable marketplace for games.

Several startup companies working on handheld projects mentioned to me they had difficulty getting dev kits and had to switch over to developing for the PC instead. I don’t know how prevalent this is, but without development kits, Brazilian talent will never learn to build for the consoles and will remain of little use to the triple-A console industry.

Distribution

The Brazilian games market also faces the lack of a dominant national retail chain devoted exclusively to games. Say what you will about GameStop, but they do us one service: They provide us with a single entity to work with.

During my stay in Brazil I visited 31 different game stores. Each of these stores had different ownership, different stock, different displays, and different billing systems. Ensuring your product got into all of the small legitimate stores in Brazil would be a nightmare. Trying to ensure they all paid you on time -- well, that might be an impossibility.

Brazil lacks its own digital distribution structure as well. The majority of the Brazilian gamers I spoke with knew (and sometimes used) Steam. Some had heard of Impulse and Greenhouse. None could tell me of a Brazilian company that provided the same sort of service.

This problem is compounded for the Brazilian developers. Most of the studios I talked to didn’t know how to, and didn't believe they even could, get distributed through US services.

Without distribution the internal market in Brazil is stillborn.

Possibilities

Despite all this, there are many ways for Brazil to bloom into an incredible market and a powerful development industry.

Online

The first and most obvious area of opportunity is the online space. I don't think Brazilian developers have the knowhow at this point to make a major Western-style MMO or even compete with second-tier MMOs coming out of Korea or China, but they do have the ability to create very powerful social network- or browser-based MMOs.

The market for traditional MMOs in Brazil is deceptively small. There are about 1.5 million players playing traditional MMOs on legitimate servers in Brazil, but there are a great number of people in Brazil who play MMOs on pirate servers. For many MMOs, Brazil is second only to Russia in its number of pirate servers. While this may seem like a negative, it proves two things: one, that there is interest in MMOs, and two, that there is a lot of rudimentary knowledge of how the back end for MMOs works. After all, if you can figure out how to set up a pirate server from the packets sent to your client, you’ve got to know something.

Brazil also has a highly wired culture, with a great deal of wi-fi-based internet access in the urban centers and 2,000 to 3,000 major internet cafes plus an additional 20,000 smaller unlicensed internet cafes. The problem with the internet in Brazil is that it's not always reliable.

All these facts, as well as the limitations of the hardware available at the internet cafes, suggest to me the possibility of a vibrant web-based MMO community fueled by microtransactions or even more creative monetization methods. Anything that could leverage the man hours and human labor available in Brazil rather than charge hard currency could be incredibly powerful there.

Outside Political Pressure

At relatively low cost, I believe international corporations could work with the industry in Brazil to get the protective tariff on games removed, which would allow game retailers to drop the prices of consoles and console games to US standards, which would in turn go a long way to help eliminate piracy. Without such a step, I believe eradicating piracy or reducing it to manageable levels will be impossible.

There is already such a bill in front of the Brazilian senate, but it is currently languishing in committee.

I also believe the Brazilian government could be convinced to begin incentivizing foreign investment in the games industry. The government is amenable to both cultural programs and to technological investment.

Once piracy decreases, the Brazilian development community and the internal Brazilian market can become viable within a few years. As it takes publishers much longer to coalesce than development houses, I see an opportunity for major Western (or even Eastern) publishers to become the dominant force and the exclusive publishers for Brazil. Foreign publishers could then exploit the comparatively lower development costs in Brazil to turn out culturally relevant (that is, locally successful) titles for all of Latin America, Spain, and Portugal.

Edutainment

The Brazilian government has been active in subsidizing, assisting, and incentivizing the creation of educational games. As a result, the edutainment products coming out of Brazil are, in my opinion, superior to what I've seen come out of the US.

While subjects that fall under the liberal arts are harder to translate across international lines, the sciences are universal. I saw products that could easily be integrated into American classrooms or shipped around the world as top-tier educational games. In the world of edutainment, Brazil will undoubtedly be an international player in the years to come.

Interactive TV

The last and perhaps most interesting prospect for kick-starting the games industry in Brazil is the country's version of digital cable. Its system is designed for interactivity to a much greater degree than ours is in the US. In 2016 they will stop using analog signals entirely, forcing a nationwide switch to digital, and, given television's incredible 90 percent-plus penetration rate, there will be roughly 150 to 170 million digital televisions in Brazilian homes as soon as the switch occurs.

This means that in 2016 there will effectively be a new console with an install base of at least 150 million -- higher than the install base of every current-generation console on the market combined right now -- with software that is totally unpiratable, which lends itself to smaller games, and which is free from outside competition. You can see where I'm going with this.

The only question is how the content will be monetized. None of the developers that I spoke with could tell me if the government or cable companies would simply pay for content then freely distribute it, or if there would be some sort of App Store-like model. If they go with the latter, I believe it will single-handedly infuse the Brazilian industry with the capital it needs to get off the ground.

There might also be incredible opportunities here for foreign developers. I am currently exploring the possibility of getting foreign content onto the system.

Conclusion

Now is the time to get into Brazil. The margin is right. If I were a betting man, I'd say the odds are about three to one that the Brazilian industry never gets off the ground. But at the same time, I'd say the return on resources invested in Brazil at this point will be at least ten to one if the industry does get past its infancy. I also believe that foreign entities have an opportunity to better those odds of the Brazilian industry becoming successful.

But Brazil is not a place for the risk-averse. You can't walk into Brazil assuming things operate there the way they do in the US. It's an easy place to lose your money and wind up with absolutely nothing to show for it. Things there will be the wild west for at least another five years. On the other hand, companies can test the waters right now at little expense, and if things go the right way, a little money now could be a lot of money in the near future.

For what it’s worth, I’m going to commit a little down there. Not enough to leave me busted, but enough that if it goes well, I'm in on the ground floor.

If you have any further questions or inquiries about the Brazilian video game industry, please contact me. I will respond to the best of my ability, or at least see that they get forwarded to the right people.

Acknowledgements

This article is based on information gained by visits to:
- Center for Technology and Society at the FGV Law School in Rio de Janeiro
- Media Lab at Universidade Federal Fluminense
- Nucleo Avancado de Educacao (NAVE)
- Pontifice Catholic University of Rio de Janeiro
- The Oi Futuro Museum
- Kranio Studio
- Donsoft Etertainment
- Overmind Studios
- Redalgo
- Level Up Games
- Mother Gaya
- Glu Mobile
- Ubisoft Brasil
- Roughly 30 legitimate video game retailers
- "Uruguaiana Station" or Saara (your source for pirated everything in Rio de Janeiro)

Note: This list is incomplete as there were development/investment groups who I can’t mention for business reasons or who asked me to leave their name out of this article.


Related Jobs

Wargaming.net
Wargaming.net — Austin, Texas, United States
[04.24.14]

Technical Director
Darkside Game Studios
Darkside Game Studios — Sunrise, Florida, United States
[04.24.14]

Mid-Senior Graphics Programmer
2K
2K — Novato, California, United States
[04.24.14]

Senior Video Editor & Animator – Temp
WB Games
WB Games — San Francisco, California, United States
[04.24.14]

Game Systems Engineer










Comments


Renan Rennó
profile image
I think the biggest efforts made in Brazil, that you forgot to mention, are Taikodom and Zeebo.

Jairo Margatho
profile image
Hi James,



Good article. You just forgot to visit the largest studios in Brazil, such as Tec Toy Digital, Overplay, Tech Front and Insolita. Those studios are selling games worldwide, for PC and Consoles.



I'm the business development director at Overplay, in 2009 we released 7 games (Dreamer Topmodel; Dreamer Popstar for NDS. Winemaker Extraordinaire; Avalon and Nanny 911 for PC. Karate Monkey for iPhone) Addictionally, we have 2 games in lotcheck process.



On Line sales are pumping up. Overplay published 40 games at Pontofrio.com for digital download and sales numbers are getting better and better. So I believe there are spaces to explore in Brazil and the scenario in not so bad as you painted.



Your research forgot to interview any member of Abragames, Brazilian Game Development Association. They are the best profesionals to talk about the market. The association participated in more than 12 international trade shows and always doing business and delivering games in an international quality level.



Taikodom and Zeebo are examples of good initiatives developed in our country and they are exported for several countries.



Any dobts, please e-mail me at jairo@overplay.com.br

Leonardo Ferreira
profile image
As an aspiring game designer from Brazil, it's very nice to read a text that dissipates most of the myths that involve game development in Brazil.I think we have the creativity to think in new ideas and business models, but to do so, we must take risks, and this is a rare thing to see brazillian game developers doing (indie or otherwise - albeit the independent game development community in Brazil is almost irrelevant).



Also, another problem in Brazil is that the image of games is still very stereotyped; we have a hard time convincing people of the relevance of our medium, which is still target of close-minded politicians.We need to start making meaningful, original titles to chance this scene.



And the Zeebo is only important in Brazil if you're a businessman.For everyone else, it's a joke.

Gabriel Pedro
profile image
I live in Brazil and own a PS3, so here's how I and most of my friends acquire games: stores that don't pay taxes.



At the same places where you acquire pirate X360 and PC games, you can usually find smuggled PS3 games. From what I understand they usually come ilegally from Paraguay or in smuggled containers.



These games are usually sold for 2x their prices in the US; so as $35 game will cost around $70 if it's smuggled, and $140 if it's legally imported. It's easy to see why the option is so attractive.



The thing is, Brazilian tax law is pretty clear on overtaxing imports of everything that's considered a non-essential good. This affects games, autos, cosmetics, spirits and much, much more. The existence of a very vibrant smuggled and pirated goods commerce is a natural consequence.

Vitor Almeida da Silva
profile image
Hi James,



Very well written.



As a programmer from a small iPhone game development studio (www.myplaymobile.com) we develop games aiming the international market (not because we want, but because we need). It is unfortunate because Brazil has a very good potential (if we had the internal market).



"TexPine" (a game producer from Tec Toy Digital) also written a good article which complements some of your thoughts: http://texpine.com/2009/03/26/how-to-fight-back-at-the-lost-conti
nent-the-brazilian-case/ (How To Fight Back At The Lost Continent – The Brazilian Case)



@Jairo Margatho: Karate Monkey is very fun (I played the flash version) :)



@Leonardo Ferreira: you are right. Our medium is still very stereotyped by mainstream media and politicians.



On Zeebo: it is an attempt to restore the internal market and be a viable alternative distribution channel, but even being a nice platform it stills suffers from some of the problems you described.



But I believe that the future will be bright, thinks are getting better every day (even if it is a little bit slow).



Very nice article.

Rogerio Maudonnet
profile image
Hi James,



Very good article. You're right about Brazilian retail prices. They are prohibitive in many aspects. In the fisrt years of the 00"s , working at Brasoft (publisher), I did all the audio localization for several titles, from LucasArts Jedi Knight and Grin Fandango to The Learning Company's Reader's Rabbit. Basically, Brasoft shut down their facilities due the piracy and localization costs. There's a lack of localized products in Brazil, if you take Europe as an example.

Despite this, it's time to invest here !



--

Rogerio Maudonnet

www.maudonnet.com.br



Portfolio:

http://vimeo.com/6746945

Maurício Gomes
profile image
Actually, NOT talking with Abragames was the correct course.

The article is really accurate.



And yes, we have a overflowing amount of wannabe designers, and a even bigger amount of wannabe MMO developers (including people willing to lose their money).



And I think that is important to say, that actually the state of the brazillian industry now is WORSE than it was some years ago, before a law lobbyed by a certain console manufacturer (I will not state names, but do your research, they still exist) went live, we had a great market, that new law increased the tax from imported consoles and games to reach 273% in some Brazillian states (yes, you read that figure right), right after this law, the piracy started ramping up, dreamcast (a promising console here) was shut down by SEGA, and everythying from there went downhill, several important and usefull companies (like the mentioned Brasoft from Maudonnet comment) crashed, or went dormant (like Varginha Incident and Outlive developers, that were once our greatest pride, btw: I know in person the makers of Varginha Incident, and they do want make Varginha Incident 2, so if someone is willing to invest, call me...).



FIRST to save the market here, we need remove this evil bizarre tax law, then we can do the other things.



But I am not really expecting this to happen, so I will stick making games for Steam and other digital distro to outside the country, until I can move out (thus unfortunally, making worse the problem of brain drain)

Bruno Bulhoes
profile image
I'am the creative director of a up-and-coming independent studio in Brazil and I have to congratulate Portnow for this great analysis. The part about the design saturation (or I would rather say, dillution) is very accurate. Brazil's industry and academia alike still doesn't realize that game design is a field in itself. This creates all sorts of problems like the ones mentioned. You can see it on our national games symposium, the biggest event around here about games, that everything is categorized under computation, visual design or arts/culture. As if sound design and game design didn't exist.



Brazil is a VERY risky enviroment. We even assert that as our business model is more focused on the international game market through digital distribution and localized efforts and the internal market is more of a bonus or simply irrelevant as of right now.



As for the taxation of games it's a lost cause. Moving to pure digital content is the only viable solution for the brazillian market in short term. Piracy and gray market will run rampant around here for years to come. The writer points about piracy are very accurate but he does not know how Brazil works in relation to taxing imported consumer goods. The taxes will NOT go away, not anytime soon at least. We have here the most expensive electronics, cars, perfumes and booze in the world. And it's not because the government sucks or to protect out own industry. It's simply an elitist mechanism. People from the top 1% of the wealth pyramid in Brazil can pay for overpriced goods or simply buy them overseas and smuggle them in. If everyone here in Brazil could afford an iPhone, an automobile or a PS3 game, this would close a cultural/property gap between the elite and the middle class/poor demographic and that's one thing south america's elite in general, including our own, DREAD from the bottom of their heart. It's a cultural problem on our sub-continent that must be worked out if we want to be taken seriously and progress as self-sufficient countries. The bottom line is this: the government gets a lot of money from taxes, the country's elite is happy with the exclusive commodities and every one else, including our own country's sovereignty takes the fall.



--

Bruno Bulhões

Creative Director - Aduge Studio

www.adugestudio.com

Mark Venturelli
profile image
Great article, James. I'm impressed on how spot-on your analysis was - you are really a sharp-minded fellow! Hope to see you around again. Best regards from your friends at Kranio Studio.

Andy Facchini
profile image
It’s not a viable market for games because of the tax rate.

I can confirm this 100%. A simple xbox arcade unit here, costs R$800 (USD450~). When I bought my first Elite, payed R$1800.

Thats why the most played games, are free online MMRPGS, with payed items.



The piracy is because the price, sometimes is a bit stupid to pay USD100 in a old title, like Viva Piñata. Thats why a lot of people here has 2 xbox's. One for downloaded games to play offline(only people with slow internet connection go to the streets to pay for pirated games, trust me, its like 0,5%), and other to use online with original/retail/imported games.



By the way, I know people will ask, if import costs the same price of the game on EUA, why pirate?

I'll try to explain. Here, we have 2 types of credit cards. Only is the National (Only works here) and the other, is the International. Guess what? The taxes to have some international credit cards are near to absurd. The 'cheaps', Paypal and other services don't accept. Good no? Its hard to be a legit-gamer here.



Bad english words(I know, my english is terrible), from a brazilian gamer. Btw, I only buy used copies (mercadolivre.com.br) , its the 'brazilian ebay'. I never saw a brand new xbox360 game in my entire life, at least, I don't pirate. And now, my xbox RROD and I don't have warranty because I bought my elite in Estonia. Welcome to brazil.

Erick Passos
profile image
Very precise and insightful article. Unfortunatelly I was on a trip and missed the oportunity to meet James when he visited us at UFF MediaLab. BTW, the rest of the guys here asked me to say thanks for the visit.

bruno belo
profile image
Yeah, it's really sad to be a gamer in Brasil. If we hadn't eBay, shopto.net, estarland.com and several other online shops that ships to Brasil, we'd been f*cked. But even using those services, we lost a lot of money. Let me give you an example:



On 10/02/2009 I bought "God of War Collection" on eStarland. I've paid 43 dollars for the game and it was a pre-sale. The game launched 11/18/2009, shipped 11/20/2009, I received it on 01/08/2010 and had to pay 17 dollars more, tariffs, they say. So, basically, I've bought a game, paid more than any american would (60 bucks), waited for 3 months for it and I'm happy. Why this? Because if I go to an store and try to buy this game it'll cost AT LEAST 110 dollars.



I had an Xbox 360 (xenon, still alive today after 2 clamps and 2 3RL) and I was banned from Xbox Live, so I decided to buy another Xbox 360, Jasper and use only original games. I've bought an arcade one, because I already had an 160gb HDD and only wanted the core console. How much I've paid for it? Almost 450 dollars. And do you think I've bought from a store?! Nope, it was from someone who was on USA. And the official one, by crappy MS Brasil, do you know how much it costs? Almost 840 dollars...



As Facchini said, it's hard to be a legit gamer here. And I'm a pessimist, I don't think it'll be better soon.

Arthur Protasio
profile image
On behalf of the Center for Technology and Society (CTS) and the CTS Game Studies, I'd like thank James for his time and effort to not only put together a well written article about the Brazilian games scenario, but also fly down here, talk, and learn about the various issues we face. Thus, providing an enriching exchange of experiences.



Best Regards,

Artur Correa
profile image
Yes!

We have no money.

We suffer from high rates and taxes.

We suffer from the problem of piracy in our territory.

We have no one to teach us how to make games and we did not receive any incentive for this.

But even so, we release some good titles, including MMOs.

Still, Brazilian students have won international awards as the Imagine Cup

We have the blood the mind and heart to revolutionize this industry.

arturapps@gmail.com

Ary Monteiro Jr
profile image
Spot on article, Portnow. Gaming industry here was blooming like ten, fifteen years ago, but suddenly took a plunge and it's struggling nowadays. Even though, a lot of people are still buying games and supporting their hobby legally or not.



I'm curious, Helder, which was the major console manufacturer responsible for those maligned taxes?

Maurício Gomes
profile image
@Ary Monteiro



It is not hard to discover, and actually I discovered on my own, but I was asked by a important person from Abragames that I would not go around saying the name when he gave a interview to me in behalf of Abragames and confirmed me that the story is true (that the tax was lobbyed by that company that I and Abragames cannot name). The company btw is a local one, obviously, it is not Nintendo, Microsoft or Sony...

Ricardo Silva
profile image
Which leaves us only with TecToy, Gradiente and Dynacom...



@article



The article is great, but the author really don't know about brazilian politics. Taxes won't be going anytime soon, for sure.

James Portnow
profile image
Thanks for the feedback everyone! Keep sending me any numbers you have or any corrections. I'd like to have as much data as possible as we continue to discuss this in the US industry.

Ricardo Carvalho
profile image
Well I have a PS3 and I buy games via eBay and eStarland, by half the price that they are sold in game stores.

Daniel Gularte
profile image
Great review. As a professor in a University in Ceará, I only can say we have many steps to go. And there is more than investment: our business culture did not wake up yet.

Also we are more like workers for outside projects. We can create grat ideas too. As a game designer, we need a chance to show not only skills in development, but with great stories, designs and concepts.

I am trying to write some books about game design, and increase our academic work with articles. Perhaps this is a good start: research for companies, using the academic way.

[User Banned]
profile image
This user violated Gamasutra’s Comment Guidelines and has been banned.

Maurício Gomes
profile image
Oh yeah, what John Smith said is true, we have to buy illegally all digital distro games, altough Steam sells to Brazil and whatnot, it is because the government yet don't pursued Valve, because what they doing is actually illegal..



This explains good part of the piracy: The ONLY way to have a legal game, is buy it, and pay the outrageous taxes (at least, if you are lucky, 60% of the game AND shipping prices summed. If you are unlucky, 273% of the game (without shipping) price + whatever tax on shipping itself.)



So, tell me, between being a criminal doing smuggling or some other bizarre operation (like using a fake US address to have a credit card, something that give here about 5 years in jail if caught), why just not go to the city downtown and buy a pirated game for 10 USD? Not only it is safer, and cheaper, but also dealers give great support (some even give their own private cellphone numbers and teach you by phone how to install the game and the crack in the middle of the night), accept returns, make marketing, are easy to find, and they are mostly cool people, that own the store themselves, so they are always following the rules like "the costumer is always right" and are always talkative and funny.

James Portnow
profile image
Good point about apple. I can't believe I forgot that.

Willian Molinari
profile image
Æ!!



Unfortunately this scenario is true in Brazil, but i know that Brazil have a lot of good developers (not only designers, but i know that we have more people that want to be designers) with fantastic ideas to start working with and we just need more encouragement from our government and more investment.



IMHO, our biggest problem is the expensive taxes, fixing this the other problems will be more easily to work with.



Regards,



Willian Molinari (a.k.a PotHix)

Ivan Garde
profile image
I must hijack this excellent article so I can complain some more, form an artist standpoint. Everyone says that any worker in a game development chain must be passionate about it. Now try to proper work in game development in such Ecosystem, you gotta be REALLY PASSIONATE! Most of the time you end up working for nothing, for titles that never see the light of the day, in the end there's nothing in your bank account and no titles to claim your participation in your CV and go back to animate TV characters for the advertisement industry

Brazil is full of passionate and talented people, some investment and some guidance (Yeah, we need some seniors around here, we surely need to stop aforementioned problems such the "everyone wants to be a designer" one) and voilà, magic! I could bet on a whole new style, as distinguishable as japan titles are from the western titles :)

Yanko Oliveira
profile image
James, it was great to see an article like this. And you got spot on on several issues, as many noted.



As i guess it's pretty obvious already, taxes are indeed the problem and they're not changing anytime soon. If a product is superfluous to the "average citizen" of the country, it tends to fall under 60% import taxes. Therefore, videogames and consoles easily fall into that category. Unless there was substancial lobbying from big companies, like say Microsoft and Sony (whose products span further than videogames), the government wouldn't really mind keep getting the public safes filled with dough.



About the gamers and gaming culture: Brazil has a HUGE amount of gamers. From casual to hardcore. And they ARE willing to pay for the games, they're just not happy on paying ridiculously expensive prices. As Andy Facchini noted up there, a lot of people have two consoles: one for online gaming and another one for downloaded games. A lot of people also rely on smuggling and/or international trips to get them. That's why PC gaming and Steam are a biggie here: you can get a GOOD game for 20 dollars, instead of 70 on a store. It's either that or buying from an international store and praying the customs doesn't tax it.



There are other industry cost discussions (like "do AAA titles really need to cost US$60 on release" which was discussed around here or Kotaku, or RPS sometime ago) that transcend the national borders, but hey, the point is: even if it's an older or simpler game, it generates revenue, because people who couldn't get it before, can and WANT to get it now. And that applies a lot to the Brazilian audience. Gamers have passions, and it's not a rare thing to see a guy who is used to downloading tittles saying "man, i WANT to buy this game, because i just plain love it. I want it's box in my shelf" and getting the product years after finishing the game, just out of desire and "shame" or "karma" - you name it. And that is also a way of penetrating the market still open to big foreign companies.



There is, although, government investing: yearly there usually is a big amount of money given by BNDES (Brazil's national development bank) to some companies that apply to a funding program and get approved. This was largely discussed in our yearly symposium (SBGames) and had Jason Della Rocca as a guest. But as he noted, it's a desert out here, and giving money around isn't showing any signs of improving the national market: very, very few companies have sustained themselves, without using investment money. It's usually finishing a title, and that's it, thanks for the ride. Obviously not talking about the little self-funded guys out there, which seem to be a majority when it comes to game development. I even heard a tale from a friend that got a job making cellphone games to a small company funded by a guy who was doing money laundering. It's that crazy out here!



So i tend to classify people between the "dreamers" and the "heroes". Dreamers like me and so many others that indeed WANT to get the national business rolling, and are trying to study and have projects, and the heroes like Continuum, Hoplon, Ignis, Perceptum, Southlogic and so many others that did what they could either as long as they could or are still pushing the boundaries of our industry. So i guess we're all somewhere between those borders. My hope is that the current indie and mobile wave gets smaller developers selling outside Brazil and outsourcing to survive - and by doing so, heating the market (like Southlogic did).



On the Academic side, well, it's complicated. Here in Brazil we have a solid academic culture and our public universities are mostly very good, with the private ones going behind them (not the case of a few like PUC, which is the one that got a deal recently with Ubisoft). The problem is: on many of the better and biggest public universities around, gaming isn't taken seriously. In my case, personally, i'm a Comp. Sciences undergraduate from UFRJ (Universidade Federal do Rio de Janeiro), and hell, if you want to deal with games there, you have to "bury" the gaming side into some form of academic research. Which is really impressive if you think about it, since gaming covers deep subjects spanning from AI, to networks, to human interfaces, to education and well, everything. Some other universities, like UFF (Universidade Federal Fluminense, the one you visited) are way, way ahead in that point: they promote research focusing on games and pretty much dominated, along with others around the country, the papers on SBGames this past year.



So why does this happen? My guess: public universities don't need private money. Therefore, they don't really need to run after investments or partnerships with the private sector - which is not what happens to PUC, for example, and that was their biggest reason on getting Ubisoft close, i guess. And that, added to the stiffness of some academic minds "in charge", isn't helping games on being considered serious business. And like every other technological medium, the gaming industry is based on the "research-private funding-government" triangle. So we kind of got a limp leg here.



I guess even on the academic side, we gotta smuggle games =P



Anyway, thanks to anyone who read through the comment/rant frankenstein, and hope your article helps spawning interest in our good ole Brasil!



Peace out.



--Yanko Oliveira

http://devoidgames.com

Kumar Daryanani
profile image
A great article. It does seem bizarre that the government encourages the education of game developers but then shackles them with such draconic measures on approval and sales of games. Still, it's good to see the medium thriving in Brazil despite the obstacles. Thanks for posting this, and to all Brazillian developers, I salute you.

Daniel Romero
profile image
"Steam sells to Brazil and whatnot, it is because the government yet don't pursued Valve, because what they doing is actually illegal.."



Hélder, can you explain me how is it illegal? Makes no sense to me, since there's no actual product crossing borders and such.

Lucio Gama
profile image
Another small independent game developer on Brazil:



Icon Games - http://www.icongames.com.br



There is much more to Brazil than what's being said on the article.



As for obtaining SDKs, yes, it's a nightmare for small companies like mine. Even the SDK for Tectoy's Zeebo, which I tried to acquire for months, and got no reply whatsoever.



But there is much more. Several small scale studios. Brazil has the knowledge! It already made 2 MMOs (Erynia and Taikodom), and several games.



The biggest problem isn't taxes. Even games imported "unofficially" are way overpriced here.

But the biggest problem for brazilian developers, on a brazilian market, it's distribution. Both for online and "offline" (CDs, DVDs...) content.



And contrary to what most people believe, piracy isn't an issue for brazilian developed content yet. Of course Windows, COD, Halo, etc are all pirated... but if you try to buy a brazilian game on "Uruguaiana", you won't find it.



P.S.: If anyone reading this is looking for a small company to invest, look no further and contact us! We can develop game for just about anything you can think of! :)

Arjen Meijer
profile image
You kinda mentioned the solution for all piracy in your article but that only happens when publishers care to put some more passion in there work. Steam seems to be on the right track already :)

Alvaro Cavalcanti
profile image
Really great article, mr. Portnow. Thank you for pointing the spotlights towards us.



I would only add that despite all the odds both Microsoft and Sony are officially on the country. MS was the first one, and when it happened the official Xbox Kit's price dropped from around R$1800 to R$1600 and keeps droping ever since (little by little, but it's dropping). Sony joined only last year, but in a better way, the company got an approval to manufacture both the PS2 and it's games on their factories over at Manaus Industrial Pole. It seems that they're currently only manufacturing the games, but the console might get on the line this year.



We hope that this moves were made as an effort to have some power on lobbying in the near future, as they'll be generating jobs and heating the marketing, thus the government will be much fonder of them.





Cheers

-Alvaro Cavalcanti.

Cesar Corregiari
profile image
Hello James, nice arcticle!



I realize good points from this analysis, and I´m glad to know that Brazil is considered a country with great potential for the game industry (and really is!).



Besides, it´s kind of sad that our brazilian friends is still claiming about the taxes that comes from government. The goverment here... well, it´s another history about corruption and we do not should expect anything from them. We´re tired to hear that, and maybe it´s time to search for another solution to make that market grows, I´m quite sure that the efforts could came from our initiative, maybe private companies, investment and some help from overseas publishers.



I´m also works in a small game company, if you want to visit: www.webcoregames.com.br



Best Regards!

Maurício Gomes
profile image
@Daniel



No product is crossing the border, PHYSICALLY. The government seemly is not bothering with digital goods yet, so good to us, that can buy games using digital distro without taxes (yay!) But if the government decides that the digital crossing of the border is still a crossing, then we have two issues:



Steam pay no taxes. Several countries Steam already pay taxes, I guess that the government will not leave Steam forever running without paying taxes.



Not all Steam games are rated by the ministry of justice, if the government reaches the conslusion that buying digitally and having in your computer physically inside the country a unrated game, then a crime happened.



This is why Steam is in theory illegal... But I hope that the government does not go after Valve, I love Steam so much O.O I bought on it lots of legal games, it makes me so happy! Until Steam invention I had only 2 legal games and everything else was pirated (and these 2 games are worth 100 USD each one Oo they both were REALLY expensive gifts from my grandma)

Bruno Palermo
profile image
@Helder + Daniel



There is, in fact, border crossing. Data from an out of the country server is being transfered, and PHYSICALLY stored, into a computer inside the country. No taxation. That, alone, would be enough to make the government go after Valve. Shhh! Apparently they didn't noticed, so... Keep it down!



The point regarding the Ministry of Justice, alone, could stop the party too.

Daniel Mafra
profile image
James

congratulations on the article accurate,

and as a Brazilian, thank you.



I read the reviews here of many of the industry,

aspiring or professional, I have to know personally.



But in general,

the structural problem was well on items listed by the writer of the article but the Brazilian lacks a search for their identity creative games.



While the Brazilian is stuck to the limitations and standards set by senior academics,

developers, technologists and full range of interests and parties that make part of the international industry (since the domestic industry is incipient) never find it using the resources it has today, without waiting for external actions, whether government or donors, their own identity and personality.



Without its own identity, he will never leave the cycle of addiction and creative dependence that surrounds the institutional and personal, and soon, without ever creating the community, any market-industry that has become relevant to humanity, as did both America North America, Europe and Eastern countries.



However, being part of growing up, this is not achieved by individual choice, the understanding of their own practical use in the current context, as can be, for self-discipline, the future usefulness, and the own authoral view rests with each development, and that which none can be correct individually.



The existence of many aspiring game designers and the emergence of micro-businesses or groups that entitles companies, which both disappear without any relevance to the national context, say the international passes through it. Everybody wants to be designers, but not everyone has talent, including those who have knowledge.



The Brazilian exports that may now be congratulated on success, which alone in this situation so adverse, it is incredibly decent. However, seeing today a series of points in our industry, I see that we are far below the minimum necessary and that any bloated on small achievements can lead the public and to developers, who often behave like non-gamers and as developers, a wrong assessment of their own projects and a range of resources badly invested. And who now has the resources to create the games, in Brazil, investing badly, unfortunately.



Anyway, developing brazilian own creative personality is not about including cultural brazilian elements in games contents, but changing the actual structures of a game by creating inspired by brazilian culture, behaviors, visions and life's perception. Using later as content elements of our cultures or others, whatever. We should begin thinking about that, first.



All in all, is a maturing process that will lead somewhere. Even if it is to transform companies here only the executors of ideas rather than generating intellectual properties. That is really a shame.

Daniel Camozzato
profile image
@ Bruno Palermo



"Shh" indeed.



@ John Smith



I heard people in Brazil can buy from the argentinian applestore. "Shh" again, I guess.

Rodrigo Correa
profile image
Great Article James,



All true, we do have all this problems holding the Brazilian Gaming Industry, but i think you (forgot wouldnt be the right word) couldnt or didnt see the main problem. Here for people who dont work with, or dont have any deeper contact with the gaming industry, dont know how profitable it can be. Though it may seem absurd is the truth, the government and many large investors such as Eike Fuhrken Batista, dont know how much money the gaming industry can generate.



The lack of information for people/govern with money to invest in this business is the main cause of not leverage it here in Brazil, and this is in large part by lack of business men in front of small firms, a fairly common error when speaking of new businesses or new ventures, the few companies who have achieved some success has a more business-oriented than a romantic vision for the work that they develop.



Here in Brazil nobody will invest in a company led by a developer with no experience in business, we need executives like Bobby Kotick (not so like him, but someone with a thought of business and who also loves video games) and not only designers and developers. We need people with a vision of businesses working with developers, Bobby Kotick dont know how to write a line of code, but without it we could not have all the Guitar Heros, Diablos, Warcrafts and so on.



Once this problem is solved alondside with Political Will, its almost certanly that the Tax problem, Educational problem and Piracy problem will be over leaving the way clear for the growth and maturation of Brazilian industry.



Money is still the mainspring of any business today, when we do show the right people that produce games in Brazil is profitable, investment will come and all political barriers will disappear. And with a culture very different from American, European and Japanese we can expect new games and new concepts that can add to the already existing and increasingly provide a quality entertainment.



Ps: I do not agree with many actions taken by Robert Kotick, but it is undeniable that as an executive he fulfills very well the role.

Marcelo Martins
profile image
Great article.



Just spreading the word: if you need music for your project, I run a studio specialized in music composition for videogames: www.clefbits.com

Maurício Gomes
profile image
It is my impression or brazillians have a GREAT need to place ads in article comments?

Cesar Corregiari
profile image
@Helder



If you didn´t realize, yourself is and add, commenting a lot like that. That´s called self-marketing. So there´s no problem to place ads, Gamasutra is also a network, which in essence offers the opportunity to share experiences and talk about our own status; Let´s people do what they want to do



cheers

Tulio Soria
profile image
Hi James,



I'm Túlio from Mother Gaia Studio.



We had a meeting in Sao Paulo :)



About the educational games, I'd like to share the experience of Mother Gaia. We received support from the federal government (FINEP) to invest in an innovative project, an educational game based on commercial game City Rain. You can read more in our blog, but unfortunately it is in Portuguese.



www.mothergaia.com.br/blog



About the educational game in question, visit www.cidadeverde.org.



Thank you. Great article. I just ask for correct our company name to "Mother Gaia Studio"



Cheers



Túlio Soria

www.mothergaia.com.br

Maurício Gomes
profile image
@Cesar



I have nothing against networking, and self-marketing, I only noticed that in this post there are a HIGH amount of links and ads (I too even advertised that Incidente em Varginha 2 needs investors... and I am not even related to it... I just happen to know the makers), like, 1/3 of the posts have blog links, or company links and whatnot.



I really don't want to judge anyone, I only found the fact interesting and I wonder why it happened...

Makslane Rodrigues
profile image
Great article, James!

I've developed a game creator software thinking in the global market due to the brazilian market limitations. But I hope to see the evolution of our market in the future.



Makslane

http://game-editor.com

Yanko Oliveira
profile image
Just a wee update that shows the kind of move that, if works the way it's being announced, is able to change things around here: Synergex ( http://www.syx.ca/ ) just announced that they will be distributing Take Two and SEGA PC tittles in Brazil, with copies produced in national territory and support/manuals in portuguese. It's what Brasoft used to do and it worked relatively well back then. The estimated price for older games? Around R$30,00 (at least it's what was announced) - and in some older news, it'd be around R$90 for one that has just been released. A bit expensive, but well, US$60,00 would be over R$100,00 so it's more than fair.



I think most people would totally pay 30 bucks for Bioshock, for example, even if it's an older game - especially because Steam doesn't sell it to Brazil =P



I hope they get filthy rich and lobby the hell out of the government! hahahah



Link to the original news article (in portuguese): http://tinyurl.com/ykvlh9r



--Yanko

http://devoidgames.com

Daniel Mafra
profile image
@Helder



Because brazilians are a plague and try to show what they have to everyone else everywhere and so they infest every media, channel, site, network, and so on. But the problem is that what we have is still weak compared to other nations, even it has that latent potential. But we overlook it and focus where it doesn't really matter and waste the few resources we have. I like what Mother Gaia did, as an example, by mixing up tetris and simcity what was really fast-cheap to do and original-creative to sell. Thumbs up to they.



@Cesar



If you pay attention, every replier here is brazilian. In games, Brazil interest only to Brazil, and to occasional travelers like the article writter up there. So covertly leaving your backgrounds and institutions inside your replies or directly writting down the Urls, won't work. Really, nobody gonna read it and call you back. Unless you say something really, really interesting, what was not the cases here. But you may get lucky. Have a try.



If you wanna do some business, do in the right place. Here you should talk as just an ordinary person. No ads.



They won't work.

kP09 HI19
profile image
@Daniel Mafra, Hélder Gomes Filho



"Really, nobody gonna read it..."



I'm one of these freak people who want to know the portfolio of the people commenting here... because everyone can critics everyone else and say everyone else is a "wannabe game designer", or Abragames doesn't know anything about game industry, but... you know, we are all "wannabe game designer" untill we show some good portfolio, or at least, one portfolio.



But the fact that Brazil has a lot of "wannabe game designer" isn't a bad news, some big names of the game industry started developing crap games too. You have to read "On the origin of species by means of natural selection" of Charles Darwin.

Chim Kan
profile image
This is an amazing article that shows the current video game industry landscape in Brazil. I'm from Brazil but I decided to move to Canada to work in the video game industry here. Canada has one of the most developed video game industry in the world. EA, Ubisoft, Relic, and many others have big offices here. Also, Canada has one of the biggest number of companies that support the creation of video games, such as 3D & FX animation, movie, rendering and many other specialized firms.



Based on what I know about Canadian market versus Brazilian market, the main reason that Canada has a well developed video game industry is because it already has a very strong entertainment industry to support animations and movies. Naturally, all the schools dedicated to movie and animation industry could create video game courses and education easily, in which case they did.



With stronger education system in video game industry, people could study and get well-trained for that profession. Eventually, that was essential for video game companies to move to Canada. Cheaper labor than US and highly qualified talent pool. Later, the government started giving tax incentives to big video game companies to establish their regional headquarters here.



I think it will take some time for Brazil to develop such market. Although, a lot of Brazilian would die to be able to work in the video game industry.



The video game industry drama in Brazil is repeated in many other industries such as startup and venture capital industry. There is a lack of education and infrastructure to support high-growth industries.

João Andrade
profile image
LOL... mr Portnow are very accurate with his article.



First let me introduce myself, maybe not properly, but you all will get the picture.



Ive run a game store for 6 years on Recife/Pernambuco/Brazil, and i think i can share some words about the subject (lets just say that i came from the streets). Ive was always been facinated by games since i was 6 years old(now have 31), then when the time comes, ive decided to open my own store. My decision to go profissional was because my girlfriends at that time got pregned and my wage, altrough a good one, wasnt what i was looking for at that moment. Ive worked all my life on the company of my family, then decided to quit that job and open my store on the area that i aways dreamed for.



In the beggining, everything was fine. Ive registered my company and openned it legaly, had 20.000 reais invested there and all. Had 3 workers, but everyone of then lacks the game knowledgements that I had for the job. Then ive decided to work on the store as an advisor for my clients and all the things a owner do, but by doing this, ive let my family aside in benefit of my store. Then the times of need comes, my store wasnt making money anymore. The public was only interested in pirated games, not in peripherals and consoles anymore, cause they are more expensive, of course. So, altrough i concluded that my store wasnt too health, ive decided to keep going only by a matter of passion and love. Ive had strengh bounds with my costumers, that keeps going there only to chat with me about topic related to games (and i liked too much). For those who knows me, im something like an authorit on this matter, so ive keep myself happy on this times being of some utility and doing what i was doing for love. But the question is, ive got divorced, and ive stays with a broken store that ive been dedicating 6 years of my life, so it was time to close her. Ive closed my store in 2009, and i am, up till now, unnemployed. I can say that the piracy here is a problem of cultural matter, not financial. The store owners that work with piracy on brazil doesnt do it for a money problem, or because the original games are too high-priced for then to buy to resell. They do it most for the felling to go against the government, a fell like being a Hobin Hood or something like that.



No, ive never fell that way, and piracy assumption aside, the matter is because here in brazil, on the owner of shops side, they just want to give what their public are looking, and on the public eyes, the cheaper, the better. Then if the government dont lower the taxes, then they can go to hell, its more of a matter of being good with their costumers than be faithfull with a corrupt government or a multimilionarie software company. Thats why its more of a cultural problem than a money one, cause we brazilians are coming from a looong period of recession and we was lectured that the cheapier, the better.



So... whats the chances of a orginal game, aquired here in Brazil, costs less than the same tittle aquired on the fountain (US)? I tell you... a big ZERO! Even if the government lower the taxes, a game would cost higher then on the USA. Then if a game was printed here on Brazil or a big publisher came to print their own games on nacional territories, they would ending competing with their internacional counterpart, would compete with thenselfs. That makes no sense to me. Theres a big problem here called nacional borders with a country called Paraguay, and only when a company strong enough come and solves the illegal products problem that crosses that border, its impossible, beleave me or not. Then this publisher will aways compet with herself.



About some big companies coming here to use our human-labor to design and create their games (not the publishing side of this business), i totaly agree. So, we came again to the point that "what we create, goes international", then i personaly dont understand why a company cant just come and take out this human resources to other more friendly enviroment countries, cause the taxes to open a company here in our nacional territories are very high, making any investments a very risk task. And you know what? It already happens! I personaly know many designers and people who work on more technical areas, that are in other countries working on big companies. Ive used to have a costumers that was on Square for two years, and everytime he cames to Recife, he goes to my store just for a little chat on many subjects related to games, and like him, many others.



So, to make the things shorty, its very hard for a small company to estabilish herself here on Brazil (taxes and more taxes that isnt import ones), altrough i do see some light, its a incoerent one, that some major companies come here, open some studios and beggin some intelectual job on this area, but in the end, a professional will still have to be open to internacional job proposals if he wants to go up climbing. Some companies has already made some efforts, but i dont have noticed a single one that prosper like their world counterparts or subsidiaries do.



Tim Viana... you are right too.



I dont know if im right, correct me if im wrong, but of course that Darwin comes to the matter too. Today, a company doesnt survive only by the internal sales, all companys needs to go internacionaly, and sorry if i piss some with my arguments, but i simple dont see a Saci Perere game or ET de Varginha one doing some sales breaks on top sales charts. Understand that im not understmating any work here, but the fact is that they simple dont have enough appear to go multinacional. To design a serious game, one must have in mind that our culture, altrough very rich, arent high consumed by foreign people nor even by ourselfs! If you see on a store two games, lets see... COD Modern Warfare 2 and As Aventuras do Sací Pererê (The Adventures of), what one would you buy? So the Dawinian rule are very well applyed on this matter too. Only if someone need to take some government subsidies to fund a project, that this rule arent applyed, but its another case scenario. I do think that on the games assumption, a multicultural eviroment are needed, just look at Mario (lol), an italian plumber that needs to rescue a princess on a world of mushroms from a spiked-turtle creature! Its briliant till today and resumes very well that on games, the minimum reference that a game can make to a sub-culture, the better, or a mix of cultures, if worked correctly, can go very fine.



Returning to the topic, the designer comunity here still have a lot to grow, not to say the market in all. Altrough i see some light on the dev comunity, i dont see one for the next 20 years or so for the industry here at all. The best that a internacional company should do is to "farm" for people here, invest on then, not invest IN here. By the way, Gameloft has closed a studio on SP last year, shrinking the market even more.



Well... i am just putting my point of view about the matter. If anyone think im a little too carried away, i tell you, you dont know me. If i got a little out of assumption or hurt anyone interests, i ask for sorry. Its cause ive had plenty of time in my entire life to think about what im telling and had equal feedback to express a point of view without being parcial. I dont work in any company, but have many friends that worked in some nacional companies like Preloud and other companies, and many others that goes internacionaly too, then i dont have any need to tell lies just to forment a unexistent maket, when the truth is that our country are "screwed" on this area. Like many posters here, yeah, i dream in someday get a job on this area and i know that it isnt easy and i have much to learn, but this should be a forum dedicted to help a researcher, not a forum to promote the Brazil as the future "golden egg". Some posts here are just untruth and sounds like cheap marketing.



Anyway, i do hope that some things that i told here is of some good use for someone, cause for me its like the only two cents that i can give at the moment.



Thanks and best regards to all.



PS. Sorry for my bad english, ive learned it by myself, or by playing games if you like.



João Andrade

Luis Guimaraes
profile image
I would say something but I probably just don't care anymore... It's me and my indie projects, ftw



@Yanko Oliveira



I'm waiting for Bioshock 2 PC for R$99,00 from Synergex, it's, if I have time to play anything, I already only sleep 4 hours, and only in the odd days ^^

Marcelo Tavares
profile image
Here in Brazil we have Rio Game Show ( www.riogameshow.com ) as an important fair that can be used by the companies to show the brazilian possibilities in the games market.

Claudia Hoag
profile image
I'm gonna repeat what others have already said, but I gotta say it too: I'm impressed with your accurate analysis. I'm Brazilian, currently living and working in the US, but secretly wishing I could have the job I have here while living there.

Claudia Hoag
profile image
James, you should check out Softex - http://www.softex.br - a country-wide NGO for Brazilian software development. They used to bring small software companies from Brazil to look for publishers in the US, among other initiatives. They're very open to partnerships, and would probably welcome a project that would introduce your products in conjunction with some local development/advancement.

Claudia Hoag
profile image
@Mauricio Gomes: "Varginha Incident" is a brilliant name!! :D

Yanko Oliveira
profile image
Stumbled upon the old topic totally by accident, but i was glad to read João Andrade's point of view: it's not an everyday deal hearing things from store owners. I have to agree that piracy is a cultural deal, but GAMERS, not the average guy that installs a game, plays it for 2 days and then goes back to paying a lan-house to play Counter Strike, seem more and more actually interested in paying for things.



I convinced all of my friends who owned a PS3 to buy the national version of God of War 3 - and the price is, although high, somewhat competitive to importing it and praying it doesn't get taxed. So i guess that real gamers (after all, they're the real market worth investing) are increasingly interested in investing. The great problem i see are, as noted by many, console prices (and then we go back to the whole tax deal). Although reading João's post makes me think that's a bit wishful thinking, we still haven't seen what it's like to have a cheaper environment.



The most important thing i agree on João's post is the fact that there is a ton of incentive to national themed games - and yeah, that's the kind of thing that doesn't sell outside Brazil. And if we ever want to have international status in all of this, we have to think more about out there than in here: the market here follows the market out there, so if you do something that goes well outside, there will probably be inside interest. Thats stupid simple, but i don't see many people doing that - i guess that's more of a side effect of "let's run after govmnt investing to startup", since we're pretty much devoid angel investments.



@Luis Guimarães: have you got any news on Synergex? Haven't heard anything in a while! =/

But hey, game-induced-sleep-deprivation is just a fact of life =D

Andrey Osipov
profile image
Thank you for the article. This is true that one can hardly find a local PC games publisher.

That's the challenge I'm currently facing. We are the leading PC games publisher at Russian-speaking territories and would love to build partnerships with local Brazillian publishers. Could someone probably advise me a list of these publishers? Would be so kind of you.

Kevin Baqai
profile image
Thank you for a wonderful article. It clarifies many details and challanges on the supply chain which makes the retail prices high (even unaffordable) beside the taxation. Our management at Proximo Games is building a chain of retail locations throughout Brazil and LATAM region to simplify the supply chain and streamline the operations for efficiency. Our first store opened last year in Curitiba and we have made significant progress and add value to our clients. Beside offering the turnkey solutions to our franchisees, we import the product directly from United States purchased directly from the publishers, thus reducing the cost. Due to our lower cost at origin and direct importation, we are able to pay all taxes and compete with the contraband. For the long haul, we need the publishers to take interest in this region, specifically Brazil as it becomes an important market by investing in the local production and working with the government to lower the import taxation.

Maurício Gomes
profile image
@Osipov



Brazillian publishers died when the law with the importation tax was enacted and the dreamcast got nuked (literally... we had a sudden "death" of the market around 2000, with the sudden raise in importation taxes, dollar price raise, and dreamcast ceasing to exist and other consoles of its generation never getting officially released until PS2 6 months ago...)



What exists currently is EA (that also sell Activision games, and from some other publishers... the most strange that this look...) Ubisoft (mostly as dev, their publishing office closed in 2003) Synergex and several MMO publishers that publish Korean games (Gamemaxx, LevelUp...)



The Brazillian entertainment games market right now is only about exportation, with help of indie euro publishers (like JoWood, Caipirinha Games...)

Bryan King
profile image
I have a proposition for any talented developers who want to do something `special`, I am currently in rio de janeiro and you can contact me directly at bryan.king1986@hotmail.com. I am very excited by the passion I hear from you guys and would love to work with you...

mark cheng
profile image
Hi guys, I'm mark from IGG. Now I am doing mmorpg licensing, and also looking for the buyer in brazil.

So, if someone interest doing business, please contact me by mail markcheng1982@hotmail.com

here some informations about IGG, www.igg.com



Cheers!

Diego Belingieri
profile image
Very good article, and I'm kinda surprised since I'm Brazilian and our market is always target of prejudice or levianism.



One aspect you forgot to touch, tough, is the lack of interest or research about our market. Also called "the case where Brazil (or piracy) is not the one to blame".



Case: Blizzard Entertainment is setting representation here to launch Starcraft 2, and the game is being released... in portuguese. Mandatory, you cannot install it in english and enter latin america servers.



Now, it could be common sense in the USA, but research exist for a reason. It doesn't take too much time to notice that a movie in DVD or other intelectual product wouldn't sell in Brazil unless there's the option to play with the original sound. It's a cultural trace - to us, Brazilians, only kids watch/play/etc imported products with voiceover. If you voiceover a game, you're implying it's for kids, and adults will feel ashamed to confess they want to play as well.



What saddens me is that the lack of research always lead leads to the worst possible interpretation. I buy games at steam at a regular basis and played World of Warcraft (original) for 5 years. Do I count when US publishers decide if they should invest in Brazil? Of course not. Even my Bnet account says I'm an US resident, otherwise I would not be able to buy or pay the fees for WoW. And piracy is not created by the industry itself? How many of those pirate WoW players would pay to have a better experience if they where allowed to do so without a lot of work?



I will buy the american version of Starcraft 2 via digital download. That means I can only play at north american servers, with more lag, but I simply despise the idea of playing Starcraft with voiceover. The data will, then, "confirm" that not many Brazilians want to buy original Blizzard software, because we are hidden in the data as north american users.



And it would cost nothing. zero. nada. Just allow the US client to work on Latin America servers.



Research. When I was graduating in Marketing, my teachers talked about it all the time. Why can't publishers use it just for a change?



I could also go on about the permanent internet connection DRM and how that can ruin a product, since Brazilian internet is not exactly stable (and I have a 12m/s paid internet, just think about most gamers, who run with 1m/s speed connections on average).



DRM protection seems to be designed just forbid people that pirate games to play them, and not convert them into the paying base (not even talking about how they punish legitimate consumers). Well, who am I to judge. Maybe it's a moral and not monetary issue.


none
 
Comment: