Inside Brazil's Video Game Ecosystem: Portnow's 2010 Analysis
In January 2010 Divide By Zero CEO James Portnow published an analysis of Brazil's video game industry after a business trip. He argued that high game prices, weak funding and a young industry held the market back, and that government support had helped educational games.
Updated
What Portnow reported
Portnow wrote that Brazil had drive, wealth and a large, educated population, and that it could become the next Korea. He also described great obstacles: rampant piracy, an inexperienced industry, almost no funding, close to impossible distribution and a government he called apathetic or hostile. His bet was a boom within a decade or no industry at all.
He argued that piracy was a symptom of price. Games six months old in the United States sold through legitimate vendors at 250 reais, around $140, and consoles cost one and a half to two times their US price. Pirate stores sold games for 5 to 15 reais, $2.80 to $8.50. People told him they would pay $20 to $30 more for a legitimate copy, and about $40 more if online play required one.
Schools, funding and serious games
Brazilian academics, in his view, outpaced US researchers on the cultural and artistic study of games, but game development courses lacked software, hardware, lab space and industry contacts. He singled out Oi Futuro Nave, a public high school in Rio de Janeiro founded in partnership between the carrier Oi and the Rio government, where students specialize in animation, script writing or game programming and work in teams from 8 a.m. to 5 p.m.
No major Brazilian publishers existed, venture capital was nearly impossible to get, and companies were self-funded or backed by small angels. The exceptions he named were Southlogic, the makers of Deer Hunter, recently acquired by Ubisoft, and Tendi Software, creators of TriLinea. Mobile was the strongest area, with developers such as Gameloft and Glu Mobile. Distribution was a problem too: even wealthy Brazilians bought most legitimate games through Steam or other digital services, console buyers often turned to Play Asia, and Amazon would not ship most games to Brazil. Limited government grants for edutainment games and simulations had led to some growth in serious games. Portnow judged the educational products coming from Brazil superior to what he had seen from the United States, because the government had subsidized, assisted and incentivized them.
What is true today
The article is online at Game Developer, listed with the byline James Portnow and the date January 20, 2010. It runs in full, including the passage on government support for educational games.
The prices, exchange rates and market conditions in it are those of 2010. No current Brazilian figures were verified for this review, so the numbers above describe the situation Portnow reported at the time.
Questions about Brazil's game industry in 2010
Why did Portnow say piracy was not the main problem?
He argued that the tax rate made legitimate games too expensive, with a six-month-old US game costing around 250 reais, or $140.
What did he say about Brazilian serious games?
He said government subsidies and support for educational games had produced serious games that he considered better than those he had seen in the United States.
Where can the article be read?
On Game Developer, under the title Analysis: Inside Brazil's Video Game Ecosystem, dated January 20, 2010.