Region Focus: Brazil

Region Focus: Brazil
Will Freeman

By Will Freeman

November 21st 2012 at 10:00AM

After years of struggle, the South American country's development sector is establishing itself as a powerful emerging market

If you have even a passing interest in the inner workings of the games industry, you’ll have no doubt heard of the Latin Amerian nation’s new status as a vital emerging market.

The development scene proliferating across the continent is booming, but there is one place in South America leading the charge. That nation is Brazil, and its games makers are eager to show the rest of the world that soon – if not already – they will be equipped to rival the output of the globe’s leading development hubs.

The clichés about Brazil certainly paint a kind picture of the region. It is famed for the beauty of its landscape, the cultural diverse make-up of its urban communities and its status as a go-to destination for those who love to party.

Such stereotypes are hardly unpleasant, but the studios and organisations collectively striving to propel the country into the games development spotlight are keen to project a very different image.

Brazil, say its developers, is a land of opportunity, with great rewards for those willing to invest the required effort. The country’s internet infrastructure is rapidly establishing itself, and a new generation are finding themselves with both the money and time to invest in games.

“I believe that the industry here is pretty young, so there hasn’t been enough time for Brazilian studios to develop a particular strength,” admits Werther Azevedo, design director at Rio de Janeiro studio Nano Games.

“What I can say is that our workforce is known to be versatile across the digital media industry. We tend to be generalists by trade, and I think this is a trait that lends itself well to the games industry. Brazilians are known for providing creative solutions to hard problems.”

CONNECTED PEOPLE

Others, however, point out that Brazil is beginning to develop strengths and specialities, largely thanks to the aforementioned dawn of new levels of robust web connectivity.

“Due to the large increase in the areas of internet technology and smartphones, the majority of independent studios are opting to invest in games for those platforms,” offers Fernando Pepe Barbalho Pereira of São Paulo’s Mayness Studios.

“There is also a great demand for advertising games on these platforms, especially for social networks – such as Facebook – and mobiles.”

“Brazil has, indeed, been doing extremely well lately, mostly due to the massive improvements in the infrastructure, which brings along a huge growth rate of connected households,” adds Julian Migura of games publishing and localisation giant UOL BoaCompra.

“But, even with the amazing number of already close to 40 million gamers across the country, only 50 per cent are connected to the internet at this point, which means there’s a lot of further growth to be expected in the coming years.”

The emphasis there is on expectation, rather than the numbers waiting for sturdy web connections. Brazil’s glass may be half empty in that regard, but the industry is collectively focusing on filling it to the brim.

Social and mobile studios are opening their doors across the region – and in neighbouring Latin American countries – at an astounding rate, and unanimously there is interest in building connected gaming experiences.

But why now? Brazil’s larger cities have enjoyed many years connected to the world through the internet, and as a creative nation the country’s populace are well regarded.

A TAXING ISSUE

The fact is, for a long time Brazil’s games makers have had it tough, and only now are core problems being overcome. One problem comes up again and again is tax, and this is a huge challenge for the technology industries in the country, as Pereira explains.

“Unfortunately in Brazil we have an excessive amount of taxes, especially for games and related services. Besides taxes, investors are not so confident to invest in a market that was stagnant during prior periods and also the unstable economy.”

Developments in the international market, in relation to the stabilisation of the Brazilian economy, have helped to improve the things, but pressure remains on the Government to recognise the industry’s potential.

“We still face high taxation from the government,” says Azevedo. “Labour laws in Brazil are pretty heavy for the entrepreneur. Whenever we hire new personnel, we must pay their salary, plus 100 per cent in tax. This makes our costs higher than countries such as Canada, US or Australia.”

He reveals that there is some talk of incentives from the Government, but points to a painfully slow system and “a grave corruption problem” that is serving to dash the hopes of those looking for help from the country’s authorities.

And there’s been another problem for Brazilian developers, and one too many from elsewhere can empathise with.

“In the past we had piracy as a big problem, and also products that were brought to Brazil in an illegal way,” states Brazil Games Show director Marcelo Tavares, who quickly moves the conversation to more positive matters.

“Nowadays, piracy is decreasing and the companies are starting news offices and factories in Brazil. On the other side, the economy in all sectors is growing and international events like the World Cup Finals and the Olympic Games are a great example of the growth here.”

MOVING FORWARD

By all accounts Tavares is right to be positive, for while it’s easy to dwell on the troubled past of Brazil’s games industry, looking forward things look very good indeed.

“Brazil today is what Turkey was like maybe two or three years ago,” offers Pascal Zuta, CEO of the European wing of games portal host Aeria Games, which counts a Brazilian office as its most recent new operation.

“There was a rush to serve Turkey when that market was exploding, and now that is happening in Brazil, but on a larger scale.”

Part of the reason for the move to embrace Brazil’s blossoming games industry stems from a reason it’s hard to be sceptical about, for the country has seized the opportunity provided by affordable development tools.

Games creation might not yet be the preserve of the layman, but affordable, accessible development software has swept in to save the South American nation from its woes about taxes and piracy.

“I believe games are just easier to make now,” insists Rafael Hrasko, business director at Vitória-based studio Interama. “When technology is not a problem anymore, there’s only lack of creativity holding you back. And creativity is something Brazilians have a bountiful amount of.

“Plus, there’s digital distribution, making it easier to survive without a big publisher to release your game in the market. Now all you have to do is have a link and an impressive marketing campaign.”

Some might accuse Hrasko of naivety, but what he is demonstrating is a spirit that permeates all of Brazil’s development scene. With so many bigger problems apparently on the wane, issues like online publishing and discoverability seem like lesser concerns, and Brazil is ready to tackle them.

Hrasko and others also state that those developers that left Brazil for the infamous brain drains, like Canada, are now returning home, tempted by the new found positivity and wealth of opportunities.

But it isn’t just homegrown talent moved far from home that is eyeing Brazil’s industry. Electronics and development giants like SCEA are also moving in on Brazil.

OPPORTUNITY KNOCKS

“From SCEA’s perspective, what we are excited about is the fact that we can now ship development equipment into most of the countries from Mexico all the way to Chile,” says Bruno Matzdorf, resource development program manager at SCEA’s Developer Services and Support Group, which sees opportunity across Latin America, and launched its PlayStation 3 in the region two years ago.

“This means that more developers will now have the opportunity to show the world what they can do on the PlayStation consoles. The ability to ship development hardware has been quite a challenge, but we knew we had to do this in order to adequately seed developers, and allow for them to reach their console potential.”

With the biggest the games companies in the world mobilising their development hardware for Brazil’s benefit, it is clear something special is taking place there.

Elsewhere, it is free-to-play that seems to cause the most excitement among the Brazilian developers striving to make a global impact with their games.

“I think the free-to-play model is tailor-made for Brazilian audiences,” says Azevedo. “Piracy has always been a problem in Brazil, not only in games, but in the music and movie industries as well.

“Brazilians like to play for free, and they are culturally inclined to get digital goods for free. So I think that a model like free-to-play, where there’s no barrier to try the game and get hooked to it, is a good match for the Brazilian audience.”

WORKING IT OUT

For its games industry to thrive, Brazil, like anywhere, needs a workforce that is both numerous and skilled, and that remains a constant challenge.

But its problem in this regard is an atypical one. The talent is there, and in abundant volumes, but the industry’s relatively small size in terms of available jobs means it is not always easy to attract staff.

“Our local institutions provide good graduates in the art and design area, but not so much in the development area,” says Azevedo of Nano Games, which has produced mobile games based on TV series by Nickelodeon and MTV.

He later adds: “Our industry is [somewhat] small to meet the hundreds of graduates interested in games every year, so I’d say overseas recruiters will likely find passionate, hardworking people, eager to work in their games industry.”

And so it is that many locally trained prospective games makers find themselves employed overseas, or, as UOL BoaCompra’s Migura points out, in Brazil’s other flourishing technology industries.

“It’s very hard to find qualified staff in Brazil, especially for web games, as you’re competing with media and internet companies that are usually able to pay higher wages and are ‘battling’ for the staff,” he says. “Many people started to outsource development work to Argentina, Chile, Mexico, Portugal, Spain or the US, or are thinking about doing so.”

Others, however, believe that Brazil’s local talent pool is actually a little lacking in terms of the games industry’s needs, and according to Mayness Studios’ Pereira, educational institutes in the nation could do more.

“It is not easy to find qualified workers in Brazil for this specific market.” He says. “Unfortunately the amount of developers is growing at a slower level when compared to the internal market.”

“Education is a problem in every sector, mostly because talented people are usually working for the government or in the industry already, not teaching,” says Interama’s Hrasko in agreement. “Of course, there are some great schools with outstanding professors here, but they are exception, not the rule.”

GRAND PLANS

But there is a sense that the market can continue to grow, which will in turn see issues around staffing fall by the wayside as the industry becomes more attractive, resulting in games that are more intricate, globally significant and, ultimately, profitable.

“It is hard to make money in Brazil, and it took us a long time, so you need to put a lot of effort in,” suggests Aeria’s Zuta. “There are many obstacles for publishers there, due to the tax difficulties, the young infrastructure, and the complexity of the payment models there.

“That’s the case with much of Latin America, but if you can overcome these obstacles, the rewards in the region are huge, and there are communities  ready to be grown, as the competition isn’t as strong in Brazil as it is elsewhere.”

Azevedo, puts the nation’s challenges into prespective, reminding us that, while Brazil hosts some of the best socialising in the world, there’s a hard working attitude that should see the emerging games business prosper.

“Although Brazil may be viewed internationally as a place where everyone likes to party all the time, we are very hardworking people,” he states.

“Our company has been fighting to stay alive against all adversities for more than five years, and we are still running strong, as are other Brazilian companies.”

If he is to be believed, expect to hear a lot more about Brazil’s development scene from us in the coming years.