Read the original article by Valor Econômico: https://valor.globo.com/eu-e/noticia/2024/10/11/quais-sao-as-estrategias-da-industria-brasileira-de-games-para-conquistar-o-publico.ghtml
According to the Brazilian Association of Digital Game Developers (Abragames), there are 1,042 studios operating across the country, but the actual number is likely much higher.
To use a familiar analogy, Brazil’s video game industry can be described as a mythical creature with vast reach and numerous long tentacles. It’s challenging to define the intensity of its strength, but its grandeur is undeniable. Its impact is unpredictable and can cross borders. However, a large part of the population has never had direct contact with it or is unaware of its existence.
This is a curious contradiction, given the current reach of electronic games in the country and the increasing importance this entertainment sector holds in the routines and minds of people of all ages, especially the youth. If there is an industry, why aren’t the products created by national companies among the most recognized and consumed by Brazilians? This is just one of many unanswered questions when assessing the impact of this business.
According to a recent mapping by Abragames, there are 1,042 studios actively spread across all states in Brazil—though the number is likely much higher, as just a few months ago, there was little formalization of game development work in the country. These companies produced over 2,600 original games between 2020 and 2022.
“Brazil is a development hub in Latin America, and at this moment, all regions have companies making games,” says Carolina Caravana, vice president of Abragames, attributing the sector’s growth to a virtuous circle, fueled by the consolidation of games in Brazilian culture. “Playing is part of popular culture. Once a person has access to a game, they can think about working in that field,” she explains. “As this barrier has been broken, more and more new entrants are starting to venture into entrepreneurship.”
Not every game can be considered a commercial product, at least from the perspective of some creators who self-identify as “independent.” “There’s a large portion of entrepreneurs who want to be sustainable at a small scale and boost revenue, but not necessarily become a large corporation or a transnational company,” Caravana adds.
A small yet highly productive operation is JoyMasher. Founded by Thais Weiller and Danilo Dias, the Curitiba-based studio has produced several retro-themed titles since it began operations in 2012 while both were working other jobs.
“Although we dreamed of living off this, quitting our jobs felt like it would add pressure that wouldn’t be conducive to making great games,” Weiller says. “So, during the day, we worked our normal eight-hour shifts, and at night and on weekends, we ‘relaxed’ by making games.”
In recent years, developing games in Brazil has become a more viable possibility than ever. Alongside access to free tools, there is a facilitated pathway for game launches through digital marketplaces like Steam for PC games and Google Play for mobile devices. Higher education courses are plentiful and support students in starting their entrepreneurial journeys while still in class.
This is the case for Woodwork Game Studio, formed by students from the Digital Games course at PUC-SP. “We started with the premise: let’s make games we enjoy playing,” explains business director Pedro Oliveira, 22. The team of 14 members, consisting of young programmers and artists, works collaboratively and has yet to receive payment for their work. The studio’s portfolio features projects created as academic work by the students. One of these, “Hands of Timber,” will be officially published by the Brazilian publisher QUByte in 2025.
In addition to their professors’ encouragement, the Woodwork team took advantage of the Crie Games program, an acceleration project by Sebrae focused on mentoring with specialists. “It was very important. I left with a different mindset regarding games and business,” Oliveira says, who is set to graduate at the end of the year.
“There are more young developers making games than there were ten years ago, because the entry barrier isn’t as high,” says Marcelo Gimenes Vieira, editor of the website The Gaming Era. However, he points out that professionalization remains a gap to be filled. “There’s this romantic aura that games are art and culture, but they’re also products, and sometimes creators forget that,” he says. “Brazilian studios lack a business-oriented mindset, and perhaps this overly purist thinking is a problem.”
The situation may evolve with the recent approval of the Legal Framework for Games, a set of laws regulating the manufacture, import, commercialization, development, and commercial use of electronic games in Brazil (gambling games are not included). This measure aims to benefit small creators who have never felt motivated to legalize their creative ventures.
“The focus is to ensure that the public sector understands how the game ecosystem works, so the best decisions can be made and actions can be effective,” Caravana states.
Currently, the concept of game creation in Brazil is broad and doesn’t necessarily focus solely on entertainment. In addition to casual mobile games and original titles for computers and consoles (PlayStation, Nintendo, and Xbox), national studios produce “advergames” (for advertising campaigns), “serious games” (with educational bias), professional simulators, and various gamification resources for companies, along with a strong presence in the outsourcing segment.
If we consider entertainment alone, could a developer survive by selling games based on their intellectual properties (IPs)? When looking at already established mid-sized studios, it’s evident that this segment is particularly young, with companies that have been active for no more than ten years. Many have already gone through bankruptcies or rebirths before finding a measure of stability.
One such case is the São Paulo-based Mad Mimic. Founded by developers who graduated from higher education game courses, the studio tried various initiatives before hitting success with its first original project, the cooperative action game “No Heroes Here,” released in 2017.
Self-published, the endeavor was supported by a grant from the São Paulo City Hall and encouraged by positive feedback at international events. “It was our first success story, where we made all the mistakes we could and also got several things right, learning how to fix our errors,” says the studio’s CEO, Luis Fernando Tashiro.
The studio’s most recent project, the pirate-themed adventure “Mark of the Deep,” is set to launch for PC and consoles in the coming months, priced at an average of R$ 40. According to Tashiro, the optimistic revenue goal after one year is US$ 1 million, with most of the revenue coming from sales outside Brazil.
With 40 employees working in a hybrid model and an office in Vila Mariana as a base, Mad Mimic dreams of achieving long-term sustainability solely with its original creations. “Our goal is to have at least three to five years’ worth of cash flow,” says Tashiro. “This way, we can keep the company running while creating our next games, and from there, we generate revenue.”
Even with a focus on original games, Mad Mimic still feels compelled to allocate one-third of its team to projects for other companies to maintain a steady revenue stream. This practice, they say, is standard among mid-sized studios. “Brazil is an outsourcing country; we export a lot of services,” Tashiro asserts.
One of the most significant trends in the country’s development industry is the specialization in providing artistic and technical services for high-budget international projects. This is the case for the Pernambuco-based studio Puga, which was acquired in 2022 by Room 8 Group, a Ukrainian-origin conglomerate specializing in outsourcing.
“For me, the company was never a child; it was always a business,” says Rodrigo Carneiro, former CEO of Puga and currently head of marketing at Room 8. “As an entrepreneur, my vision is to develop businesses that can attract investors or potential buyers. If I can create something that has the potential to be sold or that captures the attention of investors, it means the business is on the right path.”
According to Carneiro, the acquisition of Puga by a foreign group was a result of the strategic planning laid out over the years. “We always prepared the company for growth, and the sale was a consequence,” he explains. “In 2018, we were just four people. When we sold Puga in 2022, we had over 150.”
Inevitably, cultural and procedural differences emerge when a smaller company becomes part of an international corporation. “In a startup, you know everyone’s name; you have your way of working and a holistic view,” Carneiro says. “I found it strange going from a startup to a corporation with thousands of employees, where you need to collaborate with hundreds of people and follow many well-defined processes and policies. But over time, you understand that it all makes sense.”
This year, another northeastern outsourcing company went through a similar process of international restructuring. Kokku, also based in Recife, became part of the British media conglomerate OV Entertainment. Not coincidentally, both Puga and Kokku rose from the ashes of the defunct Jynx Playware, a game producer founded in the Pernambuco capital in the early 2000s.
Kokku gained global recognition by providing artistic services for the game “Horizon Zero Dawn,” a PlayStation success released by Sony. “No one expected that companies from Brazil could be part of such a big production. This launched us to an unprecedented status after six years of struggle, mistakes, and almost going bankrupt,” says Thiago de Freitas, founder of Kokku, who, after the merger, became CEO of OV.
Although based in England, the OV group (which includes the Argentine tech studio 3OGS alongside Kokku) plans to acquire more South American companies, expanding its reach into segments like cinema and TV. “The future of entertainment development will emerge from South America, as the whole world is now investing in the talents and companies in the region,” Freitas predicts.
“As we reach maturity, we will soon begin producing our own intellectual properties, which will also be disruptive enough to make a significant impact in the market. It will be a natural process.”
Another recent acquisition that has shaken up the local industry is that of Aquiris, from Porto Alegre, which, after an investment from American publisher Epic Games, has been renamed Epic Games Brazil.
Over the past decade, Aquiris has established itself as a studio of international prestige, thanks to the positive reception of “Horizon Chase,” a racing simulator inspired by 90s aesthetics. Now, under new leadership, the company is putting its original properties on the back burner to serve as Epic’s development arm, responsible for creating seasonal content for “Fortnite,” one of the world’s most popular online games.
“Aquiris was already working with Epic on some projects, and at a certain point, it made sense for us to join forces,” explains Mauricio Longoni, former CEO of Aquiris and current executive director of Epic Games Brazil. “We will continue to support our old games, but our focus now is to support the Fortnite ecosystem because of the growth this can bring. It’s a globally appealing game, and Brazil is one of the countries that plays it the most.”
“We have the same kind of talent here as we see in any global market, and this investment from Epic is proof of that talent’s quality,” Longoni states. “This marks the beginning of a new chapter in Brazilian development, where people have the opportunity to work on big games, learn, and grow their experiences, and that will only increase from here.”
According to Abragames, there are still challenges in mapping studios located far from major centers, especially in the North and Midwest states. An exception is Petit Fabrik, based in Manaus, which stands out as the most recognized studio in the region known as the Legal Amazon.
“For comparison, Finland has 5 million inhabitants and about 250 game studios. Amazonas has 4 million inhabitants and fewer than five formal studios,” says Olimpio Neto, CEO of Petit Fabrik. “A lot is spent to train people to work in factories in the Free Trade Zone. With the same investment in the creative industry, where the raw materials are intelligence and creativity, we could transform the lives of many generations. But no one discusses this.”
The executive believes that investments in companies in the Amazon region could have transformative potential. “Everyone likes to talk about how the Amazon needs a new economic model. The revenue from a ‘AAA’ [high-budget] game could sustain the city of Manaus for a year. And I don’t need to cut down a single tree to create a global game,” says Olimpio, who will be one of the curators for an exhibition focusing on games developed in the North region—the Gamecon Acre, which will take place in Rio Branco from October 31 to November 2, with free entry for the public.
Historically, events have proven effective alternatives for consumers to engage with national productions. In June, the second edition of Gamescom Latam (formerly BIG Festival) in São Paulo showcased around 80 games produced in the country. According to the organizers, out of more than a thousand registered companies in the business area, 636 were Brazilian.
Another event that often gives space to independent studios is the traditional Brazil Game Show (BGS), whose 15th edition is ongoing this week until the 13th. In the popular “Indie Avenue” area, small producers gather in lined booths, showcasing their creations to the public.
“The goal of this space is to highlight national productions, create business opportunities, and offer the public interesting options that don’t usually receive the same visibility as ‘AAA’ titles,” explains Marcelo Tavares, CEO of BGS. The promise for this year is the presentation of games from over 50 studios, most of which are national.
Despite many barriers already overcome, the biggest challenge for the national development industry still seems difficult to surpass: convincing the population to appreciate and consume national games.
“Getting Brazilian games to resonate with the public is a distant goal because our culture still heavily revolves around casual mobile games or large titles for consoles like ‘FIFA’ and ‘Call of Duty,’” says Lucas Toso, producer of the podcast “Controles Voadores,” focused on the indie market. “But the indie scene doesn’t need 200 million Brazilians playing their creations. If a studio can sell 10,000 copies of their game, they can already finance their next project.”
