[Music]
welcome to our first installment of
global games there's a lot of
information out there about the game
industry in the US Japan South Korea
England and Germany but what about other
parts of the world this series is going
to focus on those places the regions we
don't usually consider when we think of
the game industry now it's important to
know going into this that because the
information on the industry in these
other countries is so limited and what
little there is is often biased because
it's attempting to get people to come
and invest in those countries this
series is gonna be based strictly on
James's observations while in those
countries he's often called upon to
consult in emerging markets and he
always tries to get around and get a lay
of the land while there so this will be
his transcription of how he views those
markets as such we can't guarantee 100%
accuracy in fact there are places where
we may be dead wrong and it's certainly
possible that things may unfold
differently than we predict but we will
do the best we can so with that caveat
in mind let's get things started with
the country James is perhaps most
familiar with Brazil Brazil is an
incredible country for games both in
terms of its potential and its
challenges Latin America is gonna become
a huge market for games in the next 20
years there's just no other way to look
at it the economy of many Latin American
nations is approaching the point where
games are a viable mass-market
entertainment while simultaneously we're
just at that point in time where what we
consider a game is changing and the
price point on games is dropping
drastically with digital downloads and
mobile and tablet games when you couple
that with the fact that the triple-a
industry is in both Japan and the US
have found that selling exclusively to
their own internal markets is no longer
supporting the budgets of the games
they're creating and that there are a
half billion people living in Latin
America you've got the makings for a
huge new market and Brazil is poised to
be at that new markets center okay so
let's talk Brazil's current strengths
and weaknesses first the elephant in the
room
piracy though the general perception of
Brazil is starting to change when James
first began doing work there a few years
ago any time he asked anybody in the US
industry about Brazil they would respond
with something akin to oh yeah they're
like China but without as much money and
that statement is false on a lot of
levels so let's correct that now when
people say that sort of thing it's
because of the pervasive level of piracy
in Brazil the perception was that you
can't sell games in Brazil because
everything's pirated and truth be told
there's a lot of piracy in Brazil there
are whole pirate markets just out in the
open where you can get anything you want
at a fraction of the cost
most Xbox 360s there are sold pre modded
to play pirated games heck even at
legitimate game retailers you can
usually ask
to see the book which is simply a binder
of pirated games at an unbelievable
discount but if that's all you see when
you look at the Brazilian markets you're
not looking closely enough it's not that
Brazilians won't buy games it's that
there's a number of impediments that
make doing so completely unreasonable
first off is price because of the way
Brazilian taxes and tariffs work an Xbox
360 game that came out about six months
ago in the US can run anywhere between
120 and 160 US dollars not adjusted for
GDP not in terms of buying power but
straight up 120 to 160 dollars u.s. for
a game that means that buying a game
legitimately in Brazil costs anywhere
from twice to almost three times the
price you'd pay in the US now many of us
would be hard-pressed to justify
spending a hundred and sixty dollars on
most games and while Brazil is doing
quite well the average citizen there
doesn't have the same level of income as
most game consumers so these prices are
clearly prohibitive consoles themselves
have the same type of price tag with ps3
is running over a thousand dollars at
retail just a few years ago now compare
that to your standard pirate store
buying a pirated game usually runs about
five dollars us or about 125th of the
cost and comes with better service at
many of the pirate stands if you buy a
game and you don't like it they'll just
let you give it back to them and get
something else instead if you do it
within a few days of the original
purchase but this is a very solvable
problem the taxes and tariffs that are
inflating these prices are holdovers
from an era when Brazil was trying to
establish their industry around the Sega
Genesis or Mega Drive depending on where
you live in fact funny side note in
Brazil you can still buy a brand-new
Sega Genesis they are the only place in
the world still producing them but these
taxes are vestigial they don't represent
anything modern lawmakers care about
just a little bit of pressure from the
outside along with the promise of new
economic opportunity and I'm certain
those taxes would just melt away in fact
I believe the only reason they're still
there is that it's not high enough on
anybody's priority list to change them
exacerbating the piracy problem is the
fact that until very very recently you
couldn't access Xbox Live or PSN from
Brazil when James asked about hard drive
sizes when going to buy a console there
the fellow running the stand said why do
you want a hard drive you can't get
anything on it here just take this
memory card you'll be fine of course
this trend is changing too and with
online play comes an incentive to buy
legitimate games next in the jumble of
legal issues surrounding the Brazilian
game market games there are rated by the
government not the industry like they
are in the States or Europe this means
that every single game that comes out
has to get a rating to be sold
Zil and that may not sound like a big
deal at first you may think to yourself
pretty much in every game I play has a
rating but when I say every game I mean
every game for the longest time the
Brazilian iTunes Appstore didn't even
have a game section because every single
game that was put up would have had to
go through that tiny office they have
for approving these things again though
I believe this is only the case because
right now there's very little economic
or political incentive to change this
system finally we have to talk about
distribution while there are some big
box chains in Brazil there really isn't
anything as ubiquitous as a game stop
there and while plenty of people may
complain about Game Stop as a
distributor having to deal with a
thousand mom-and-pop retailers is a huge
headache there isn't really a good
equivalent to steam down there either
and while sites like submarino's sort of
fill in for Amazon it's still not enough
of course here too is an opportunity for
companies like Steam or Amazon who
already have the infrastructure to fill
a much needed niche and control yet
another huge market in the process but
assuming you can see past those issues
Brazil has the largest economy in Latin
America it has the largest population in
Latin America it has a relatively robust
higher education system and turns out a
number of excellent programmers I mean
Louis scripting was invented there plus
Brazil has a strong 2d art tradition and
a pretty decent 3d scene as well
the size of the population means that
it's possible for a games industry to
grow there this will probably come up in
a lot of these episodes but it takes
either a large population like in Japan
u.s. or China or a very dedicated
population like in South Korea to create
the sort of internal market that a games
industry seems to need to grow in
nobody's making games for Brazilians or
really even doing a great job of
localizing much for Portuguese and even
when they do it's usually continental
Portuguese rather than a Brazilian
dialect this means that this large
internal market is underserved and so
has a chance to support local companies
rather than having them just be crushed
by more established international
developers who have more resources the
games are a leisure activity so it takes
a sizeable economy with at least a
moderate-sized middle class to really
create an internal market both of which
Brazil has additionally from James's
impressions while down there
Brazil is a place where a spirit of
progress flows through a lot of society
from the civic level down to the
individual level there's a desire to see
Brazil take its place amongst the most
prosperous nations there's still a lot
of poverty especially in the north but
with this desire to move forward comes a
desire for the luxuries like games while
the K through 12 public educational
system is shaky at best - due to a
population explosion the public
universities are of extreme
high-caliber the public universities are
actually the harder ones to get into
their private universities sent them not
have us get a reputation one of the
things that a country needs to kickstart
a games industry is a plethora of
available programmers while Brazil isn't
doing as well in this regard as some of
the countries we'll cover in this series
later it certainly is one of if not the
strongest Latin American country in this
regard oh and interestingly enough one
of the ways Brazil's trying to solve as
educational crisis is with games both
through schools which teach every
subject through game production like oi
oi futuro Navi and with public grants
for educational and artistic games which
leads us to the last point more than
piracy and more than distribution if
there's any one thing that's keeping the
Brazilian industry from coming to life
it's a lack of funding most of the
studios James visited while there were
other satellites of larger international
game companies stuck making games for a
non Brazilian audience or small groups
who self-funded there's no such thing as
a publisher there there are no EAS or
Activision's investors don't really
understand the sector and the government
while doing a phenomenal job trying to
fund educational endeavors doesn't have
any real interest in subsidizing the
entertainment side of the industry here
to me is where established publishers
might come in be heroes and make a great
deal of money in the meantime
dropping a few million dollars on Brazil
now probably ensures that publisher is a
major player in Brazil and thus all of
Latin America in the years to come wait
just a half decade and Brazilians will
solve this problem for themselves with
great sacrifice and the loss of many
small companies that could easily be
saved or we can work with them to solve
it today but after all this you may be
asking yourself why should I care what
does it matter to me if Brazil can form
its own industry or not it matters to
all of us because games as an art are
cultural products Japan produces very
different games from the u.s. South
Korea gave us a whole new way to think
about mmo's Russia is now showing us
that whole styles of games that we had
considered dead and abandoned can still
be resonant today Brazil has an
incredible and unique culture whether or
not their industry gets off the ground
and matters to all of us because there
may well be entire genre of games that
will never see without their perspective
that's the reason we're doing this
global game series and trying to talk
about different markets around the world
I hope you enjoyed this look at Brazil
in future episodes we'll try to keep
things a little shorter and establish a
system for presenting the essential
features to look at when seeing if a
games industry is viable in that country
listing some of that country's quirks
then perhaps showing a game that really
highlights that country strengths I'm
looking forward to doing more of these
we'll see you next time
[Music]