The Market for Video Games in Brazil

The market for video games in Brazil has expanded to the point where it has captured the attention of global manufacturers and publishers. In this article we will trace the history and current overview of the market for video games in Brazil.

History of the Brazilian Gaming Market

The sales of gaming hardware and software in Brazil has historically been driven by factors such as the prohibition of imports, high taxation and the adoption of practices such as smuggling and piracy.

Video games were not officially allowed to be imported to Brazil until the 1990’s, and the only consoles legally commercialized in the country prior to this period were the ones manufactured in Brazilian territory. Following the lift of import embargos, video games have since been categorized as non-essential products by the country’s regulatory agencies, and were charged rates similar to the ones applied to firearms and alcoholic beverages.

This burdening taxation led many of the largest video game manufacturers in the world to avoid entering the country’s market due to the difficulty of distributing their products. By then, the Brazilian public showed great enthusiasm for gaming but official retail prices were far too expensive.

As sales prices for video games and consoles in Brazil remained extraordinarily high throughout the 1990’s, many consumers and grey market sellers saw the practice of illegal imports, mostly through unsupervised borders of countries like Paraguay, as a more viable alternative to bringing these products into the country.

Not only did illegal importing become general practice, games piracy in Brazil remained high during this period, driven by the lack of available products combined with the high prices charged by the country's retailers. This scenario led to the development of some intriguing characteristics in the gaming market in Brazil, particularly in the case of consoles.

Manufacturers that did establish operations in the country saw their products receive extraordinary and prolonged success due to the lower prices offered to Brazilian consumers when compared to more recent and highly taxed hardware. This was the case for Sega, which launched their Genesis console in Brazil under the name Mega Drive in 1990 following a partnership with national company TecToy.

The console, developed in the 1980’s, was very successful in Brazil and iterated until 2009, at some point reaching more than 70% of the market share for gaming hardware in the country. In fact, as of 2015 it is still possible to purchase updated or emulated versions of legacy consoles such as Sega’s Master System and Mega Drive from major Brazilian retailers. These platforms serve as entry-level gaming devices for Brazilian consumers, being offered at prices as low as BRL 100.

A similar case for prolonged console lifespan can be made for Sony’s Playstation 2, which after being discontinued in most global markets remained one of the best selling consoles in Brazil, almost 15 years after its launch, due to its affordable price and wide availability.

Recent Changes in the Brazilian Gaming Landscape

Although factors such as smuggling and piracy remain largely relevant to Brazilian gamers, some changes in the country’s regulation and presence of foreign manufacturers have had significant impact on the market.

One of the major breakthroughs to happen over the last few years was the introduction of several gaming hardware manufacturers to Brazil. This is the case for Microsoft, which started manufacturing the Xbox 360 consoles in 2011 and the Xbox One console, prior to its launch in 2013. Meanwhile, competitor Sony initiated the manufacturing of the Playstation 2 console in 2009 and the Playstation 3 console in 2013, and recently announced that Playstation 4 would start manufacturing in the near future.

Due to Brazilian policies towards imported products, locally manufactured hardware meant prices significantly reduced, which contributed to the increase in sales of gaming consoles by legalized retailers. Not only that, but the price of games was also substantially reduced due to the exemption of certain taxes on industrialized products introduced by a law in 2011.

In addition to home consoles, other gaming platforms have gained traction in Brazil as of recent years. This is the case for premium PC games, which regained a large share of piracy adopters after the introduction of competitively-priced online marketplaces such as publisher Valve’s Steam. Free to play PC games, which have long been a mainstay in the minds of Brazilian gamers, attracted even more fans following the launch of massively successful e-sports titles like League of Legends and Defense of The Ancients 2.

On the other hand, mobile platforms such as smartphones and tablets saw rapid adoption in Brazil due to their reduced prices and became one of the main pillars of gaming, driven by reductions in sales prices of smartphones and tablets and a large quantity of freemium downloadable software available.

With the population’s interest in this medium continually increasing and the combined cost for gaming in Brazil being reduced in recent years, the size of the national market has displayed unprecedented growth, with analysts indicating a total value approaching USD 2.6 billion. According to market analyst NewZoo, Brazil is currently the 11th largest market for gaming in the world.

Consumer Profile and Most Popular Titles

The audience for gaming in Brazil has expanded significantly over the last few years, bringing this medium close to the status of a massively adopted form of entertainment. Data from Abragames, the Brazilian Game Developer Association, suggests that there are close to 61 million active players in Brazil.

According to a study from 2015 by companies Sioux and Blend New Research, this public is split into 53% male and 47% female consumers, with an average age of 25 to 34 years old. The same research found that 72% of Brazilian players have bought games localized to Portuguese, while 53% enjoyed the translation and dialogue dubbing.

The most popular games in Brazil are comprised of a variety of genres, from sports to action, adventure and puzzle titles. According to market analyst Gfk, the highest selling console games in 2014 were:

  • Fifa 2014
  • Fifa 2015
  • Pro Evolution Soccer 2014
  • Grand Theft Auto V
  • Minecraft
  • Call of Duty: Ghosts
  • Fifa World Cup 2014
  • Watch Dogs
  • Assassin’s Creed IV
  • Battlefield 4

Retail Prices

Although the cost for games in Brazil have seen significant reduction over the last few years, the current retail price for these products still remain some of the highest in the world. According to analysts, the combined cost of taxation for games in Brazil increases the price for the end users by over 70%, while other factors such as transportation and distribution also add up to retail prices.

In fact the highly burdening taxation applied for gaming products in Brazil was one of the main reasons that led global giant Nintendo to quit official distribution of their products in the country during 2015.

Below, we have compiled a list of the average price of some of the most popular consoles and games sold in Brazil to give an overview of the current retail price adopted for these products:

  • Xbox One console: BRL 2.000
  • Xbox 360: BRL 900
  • Playstation 4: BRL 2.500
  • Playstation 3: BRL 1.200
  • Nintendo Wii U: BRL 1.800
  • Nintendo 3DS: BRL 850
  • Batman: Arkham Knight (Xbox One): BRL 250
  • The Witcher 3: Wild Hunt (Playstation 4): BRL 230

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