It's one more sign that premium game publishers and eSports companies are ramping up investment in Brazil. It's not an easy market. High taxes and import policies inflate game prices, suppress legitimate sales and encourage piracy and smuggling. But by investing in the country, some companies are finding ways to tap Brazil's potential.
Brazil is home to the world's fifth largest population, one that is incredibly wired. Nearly half of the country's 200 million people have access to the Internet. Analytics firm SuperData Research projects that revenue from digital games—the lion's share of sales—will grow to $2.4 billion in 2015 from $1.4 billion last year, making Brazil the fifth largest digital games market in the world.
Mobile gaming attracts the most spending by a mile, but the market for higher-priced, premium games for PC and consoles remains underdeveloped, in part because Brazil heavily taxes consoles and games. New console games can cost up to $150, compared with about $60 in the United States. In October, Sony announced on its blog that its new PS4 would cost more than $1,800 in the country because of local taxes and import costs.
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Analysts say many Brazilians would pay a fair price for legitimately sold games and consoles. Instead, bootlegged copies meet pent-up demand.
"The market is ready for games as a major form of entertainment, but the tax laws still prohibit it being a viable market for traditional games," said James Portnow, CEO of Rainmaker Games.
Console makers have reduced prices significantly by producing their machines locally. Microsoft began making Xbox 360s in Brazil in late 2011. Sony followed suit with domestic production of the PS3 in May of last year.
Even with domestic production in full swing, various taxes put EA's new releases at about $90.
With console game prices stubbornly high, massively multi-player online games—better known as MMOs—are dominating the premium segment. These games are mostly free-to-play, but generate revenue when users make small purchases on virtual goods.
These micro-transactions add up. In 2013, MMOs generated 25.7 percent of game revenue in Brazil, while consoles accounted for 5.3 percent, according to SuperData Research.
"I would argue that free-to-play—because it got there first, was able to allow many people to play—that's going to be a standard moving forward," said Joost van Dreunen, CEO of SuperData Research.
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Riot Games, publisher of the free-to-play battle-and-strategy game League of Legends, is one company investing in local infrastructure to improve the experience for gamers.