Overview of the Brazilian Game Production Industry

The game production industry is hardly a major part of the Brazilian economy, but the potential for growth in this sector in the near future is undeniable. In this article we will highlight the major players in this segment and summarize the current state of affairs of the gaming industry in Brazil.

The Brazilian games market

The gaming industry is currently one the fastest growing in terms of revenue in the world, reaching USD 66 billion by 2013.

The Brazilian gaming market has traditionally been focused on free to play or cheap experiences that do not require major financial investment by players. This arises from the abnormally high prices for gaming equipment and software caused by the country’s taxation policy as well as the limited access to payment methods such as international credit cards.

This landscape, however, is not expected to last for long. Recently, the gaming industry in Brazil has displayed significant growth due to the establishment of game console factories in Brazil, which has led to a reduction in taxation for these products, and also because of a recent surge in disposable income for consumers with access, and a desire, to acquire digital entertainment.

Recent data by the Commercial, Industrial and Cultural Association for Brazilian Electronic Games, or ACIGames, shows that the Brazilian video game market accounts for USD 2,6 billion, a modest achievement when compared to the historically consolidated North America, Europe and Japan markets but a major advancement nonetheless.

Game Production in Brazil

While game consumption has risen quickly, game production is still severely limited in Brazil. The lack of government incentives for companies to initiate and maintain game development without heavy taxation and bureaucratic arrangements has resulted in a small, fragile number of enterprises dedicated to this business in a country with great marketing potential and enormous talent for creativity.

Recent developments in the worldwide gaming market show significant breaches for the expansion of this industry in Brazil. The meaning of a successful game is no more limited to a boxed product sold in stores but is now achievable entirely based on online distribution and in multiple, vastly spread platforms, such as mobile devices, social networks or even online stores.

Independent, social, mobile, casual, low-cost games are now capable of generating as much, if not more, revenue than traditional published blockbuster products sold to customers at premium price points. This allows for game production teams to not require the expected major investment to start the development of successful products but rather focus on niches and explore new ideas without financial restraints.

This is precisely where most of Brazilian game development success stories have originated from in recent years. Small teams with limited resources but notable ideas and creativity have released their products through wide-reaching digital distribution platforms and received a warm, if unspectacular, financial reception in the process. As a sector of the gaming industry that rewards innovative ideas, the development of smaller, multi platform products is where the Brazilian industry shows a significant opportunity to thrive.

Game types

Because of company management and creation difficulties, a large portion of Brazilian game developers have not limited their production to entertainment products, but rather diversified their portfolio to other types of games as services to other companies, organizations and brands.

These alternative game types are:

• Advergames: Gaming experiences developed to advertise brands or products, mostly available through websites, social networks or mobile applications
• Serious Games: Applications designed for educational or instructional purposes distributed through simulators or regular software

The low risks of developing games through contractual requests turns a significant portion of Brazilian developers to these segments, while development of regular entertainment consumer products is delegated to a few risk accepting enterprises.

Statistics about game development in Brazil

A recent study by the Brazilian National Social and Economical Development Bank, or BNDES, found around 130 active game development companies, a dramatic increase from the 42 active companies in 2008 according to the Brazilian Digital Game Developers Association, or ABRAGAMES.

These companies produce games for a wide variety of platforms and segments, according to research, but some platforms are still dominant. Over 80% of these companies develop for PC or Browser platforms, while more than 75% develop for mobile platforms.

Around half of Brazilian game developers started activity during the last four years, a sign of the recent surge in the industry. Also, most of the companies, around 75%, have yearly revenues of less than BRL 240 000, equivalent to USD 105 000.

Brazilian game developers

Some of the most notable game developers in Brazil are:

• Hoplon: Game developer founded in 2000 in the southern state capital, Florianópolis. Creator of the massive online spaceship combat game Taikodom and also publisher of foreign online games
• Aquiris: The largest developer of Unity engine games in Latin America has been active since 2007 and produced more than 40 titles, some of which are advergames for companies like Cartoon Network, Warner Brothers and Unilever
• Oktagon: Mobile game developer founded in Rio de Janeiro in 2008, responsible for multiple titles released on iOS and Android platforms
• Behold Studios: Development company founded in Brasilia in 2009, responsible for successful title Knights of Pen and Paper
• Webcore Games: A division of the digital publicity agency Webcore and has produced a variety of advergames and brand experiences
• Insolita Studios: Developer of multiple platform products based in São Paulo and responsible for social media success Turma do Chico Bento
• Smyowl: Mobile titles, advergames and NUI game experience developer from Sorocaba
• Tapps: Developer of multiple mobile titles founded in 2012 and based in São Paulo
• Asantee: Original titles and game engine developer based in Campo Grande
• M.gaia: Mobile game developer founded in 2008 and established in Bauru
• Flux Game Studio: Developer of multiple advergames and gamification projects founded in 2012
• Taw Studio: Developer of multiple original products and advergames founded in 2009
• Duaik: Creators of the recent success Aritana and the Harpy’s Feather established in 2012
• Swordtales: First developer to receive financial incentive from Rouanet Law founded in 2011
• Hive: Advergames developer founded in 2007 and responsible for multiple successful cases
• Napalm Studios: Game resource developer based in Porto Alegre and founded in 2008
• Manifesto: Developer of multiple original titles and advergames based in Recife and founded in 2006
• MTI Studio: Advergames and original titles developer based in Rio de Janeiro established in 2011
• 2Mundos: Social games developer founded in 2011 and creator of multiple successful original titles and advergames
• Zaxis Tools: Entertainment and capacitation simulators developer founded in 2009
• Oniria: Developer of simulators for companies such as Petrobras and Vale
• AENNOVA: Serious games, e-learning and multi-platform developer based in São Paulo
• E-guru: Serious games developer specialized in e-learning and company management based in São Paulo

Brazilian game publishers

Most games distributed in Brazil are published by foreign companies, as the number of national game publishers are significantly reduced. Some of these companies are:

• OnGame: Publisher of foreign massive multiplayer online games in Brazil established in 2009
• Hazit Online Games: Online game publisher responsible for massive national success Priston Tale
• Tech Dealer: PC games publisher of national and foreign titles and distributor of game accessories