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What You Might Not Know About the Latin American Games Industry
by Robert Levitan on 10/18/11 10:13:00 am   Expert Blogs   Featured Blogs

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The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

How can a game publisher succeed in a region where getting their titles into gamers’ hands is difficult, or even impossible? Latin America, and Brazil in particular, are cited as a rapidly growing market for games. Nobody is disputing that there are millions of gamers across Latin America, and their appetite for MMOs and other online titles is growing. Just last week, FPS-MMO Operation7 was downloaded over 30,000 times by gamers in Colombia, Argentina, Chile, Mexico, and Peru. Meanwhile, in Brazil alone, gamers downloaded Combat Arms 69,000 times last week.

However, in a recent study, my company Pando Networks analyzed the download speeds and completion rates in 224 countries around the world and Latin American territories such as Brazil, Argentina, and Colombia ranked near the bottom. In the very first blog I wrote here on Gamasutra, I stressed how crucial it was to provide quick and easy downloads in order to ensure the success of an online game, yet getting a game in Brazil will take up to ten times longer and fail far more frequently than getting the same title in the United States.

It’s not my intention to be a naysayer and warn you away from expanding your business into South America. On the contrary, I am bullish about the online game industry in that region. I’ve been in Sao Paolo meeting with game companies.  The energy in the air is palpable when local game company executives discuss the growth and opportunity that is possible there. In many ways it’s reminiscent of the early days of the internet and I felt like I was reliving my own start in the online business world in 1995.

Success as a publisher is certainly possible in countries such as Brazil; it simply takes a better understanding of the unique challenges that the area presents, and the right approach to those obstacles. Witness the success of Level Up! and axeso5.com, which have brought major hits such as Maple Story, Grand Chase, Audition and Perfect World to Latin American audiences, establishing themselves as top game publishers in the region. Just last April, axeso5.com announced a partnership with NHN Corporation.Both LevelUp! and axeso5.com have become highly desirable partners for publishers who wish to start doing business in Latin American countries. I spoke to colleagues at both of these companies to gain a better understanding of the Latin gaming market, and they provided some indispensable advice that everyone should keep in mind when they decide to broaden their userbases.

For starters, it’s worth pointing out that both Level Up! and axeso5.com have their roots inside Latin America, and have an intrinsic understanding of their countries’ gamers and their habits. Level Up!, for example, launched in Brazil with the appointment of Julio Vietez as Managing Director who had previously worked with Tectoy, a Brazilian company which represented SEGA. Meanwhile, axeso5.com was founded by Argentinian executives and expanded into Peru, Colombia, Venezuela, and several other countries in South America. A company operating in the US or Korea may not fully appreciate the differences between their local gamers and those playing in Brazil or Argentina – namely, what they play, how and where they play it, and how they ultimately pay for it.

Chief among these differences is the cybercafé as the Latin American player’s gaming environment of choice. As I mentioned earlier, the average internet connection in a country such as Brazil is far slower than the US or Korea, with several of Brazil’s cities included in the ten slowest cities worldwide with download speeds of 65Kbps. In addition, end users’ PC hardware tends to be less powerful, often falling well below the minimum specifications needed to run a modern game release. The cybercafé alleviates both of these problems for the average Latin American gamer, providing faster connections and higher-end hardware.

The first step towards success, then, is an obvious one: maintain a strong relationship with cybercafés and their managers. Not only will this provide players with a far more optimal game experience and a better impression of your product, but it offers you the broadest and best possible audience, composed primarily of game-friendly citizens looking to spend their spare time and money on the sort of entertainment you provide. It’s still vital, of course, to make sure you have a well-implemented consumer download experience including a smooth registration, game download and patching process. The cybercafé, though, will be a critical component of your strategy. As I learned from my colleagues at axeso5.com and Level Up!, it may be your key to everything from discovery, to retention, to monetization.

According to axeso5.com’s CFO, Mariano Martire, targeting cybercafés will provide a far more effective ROI than attempting to disseminate your game through traditional advertising or media. “It’s hard to find someone in their late teens or early twenties who has never played an MMO,” he told me in a recent conversation. “Yet, for all of those players’ familiarity with the genre, through industry leaders like WoW and others, you don’t see them appearing in the mainstream media. There are no TV ads, no print stories; nobody talks about them on the news. Still, plenty of people talk about them – discovery of new games happens in a more ‘underground,’ organic way. Usually that’s face to face, with friends at the cybercafé.”

More than just offering gamers a more reliable and higher-quality experience, cybercafés function as their hub for social activity, where players can hang out together, talk about games, and actually play with their friends. The popularized image of an MMO player in the US is that of a solitary gamer, isolated at their computer but connected to friends digitally. In Brazil, by contrast, it’s common to see a cybercafé divided into clusters, a few PCs at a time, with four to five gamers all playing in the same game, enjoying the social aspects of their MMOs via actual physical proximity. I have been told that parents in these countries prefer for their children to gather in the relative safety of a cybercafé rather than roaming the streets, lending online gaming a legitimacy and importance it is still struggling to reach in other parts of the world. These tightly knit social groups are the primary gaming audience, and it is through their shared experiences and their highly valued word-of-mouth that a game will live or die in Latin America.

This brings me to the next vital key to success: Form a bond with that audience and maintain a constant presence at the forefront of their attention. Martire warned me that, due to a number of unsuccessful free-to-play MMO experiments by publishers to reach Latin American gamers, MMOs have a reputation for lacking quality, service, and longevity. “Players here are accustomed to games with no enforcement of policies and no staying power. It’s a self-fulfilling prophecy: the players don’t want to buy any virtual goods because they expect the game will be gone in six months, and because nobody buys any virtual goods, the game is gone in six months.”

This is also a tremendous waste of potential because Latin American gamers are players that stick around and keep playing. Owing to poor internet speeds and the resulting difficulty of obtaining new games, once a player discovers a game they like, they tend to stay with it more than gamers in Korea or the US, where a player can easily move on to the next title if they are even slightly dissatisfied.

There is plenty of room for success in Latin America but it will only come from companies that take the time to actually know and care about the audience there. Take your cues from companies such as axeso5.com and Level Up! which have leveraged their local expertise to become the top publishers in the region. True long-term success takes more than just checking off “Spanish” on your list of supported languages. (For starters, the official language of Brazil is Portuguese.) Do your homework and you stand a much better chance of making the grade.


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