In Brazil, a PlayStation 4 costs nearly as much as a decent used Toyota, so gamers in that nation are turning to the free-to-play business model to get their fix.
The market for free PC games with microtransactions is growing in Brazil, according to market-research firm Interpret (as first reported by Yahoo Finance). The South American nation has 51.5 million people between the ages of 13 and 65 that play games. And 33 percent of them, more than 17 million, play free-to-play PC releases. That’s up 20 percent from 14.1 million in the previous year. Interpret estimates that Brazil’s consumers spend $470 million on free PC games like League of Legends and Team Fortress 2 that feature in-app purchases. Publishers are investing more in Brazil as its economy is quickly coming online and is potentially worth billions.
“F2P PC games are an ideal middle ground where motivated developers and publishers stand to gain from their efforts in Brazil,” said Jason Coston, Interpret’s research manager. “The free-to-play business model aligns uniquely with the needs and resources of Brazilian gamers. Our data show that, in Brazil at least, the F2P PC market continues to offer great opportunities.”
The Brazilian model that Coston cites refers to the large number of people looking for gaming entertainment but who can’t get it from the expensive traditional consoles. The country charges a steep import tax on consumer electronics like the PlayStation 4, which Sony released in the country last year. That means retailers must sell the powerful box for the equivalent of $1,800 in U.S. dollars. The PS3, meanwhile, still costs around $1,000 — although Sony has plans to start manufacturing its consoles in Brazil, which will bring down the price significantly.
Gamers can avoid those tariffs by purchasing PCs with parts made domestically. That makes Windows-based systems the logical choice for a huge number of Brazilians.
The country is also seeing a fair amount of spending on mobile apps that use a similar in-game purchase scheme, but Interpret explains that is slightly less welcoming to foreign developers. Localization costs and a large amount of competition makes it more difficult for studios to see a return on their investment in Brazil on Android or iOS.
Brazil is a part of an unofficial collection of nations known as “BRIC,” which includes Brazil, Russia, India, and China and that have fast-growing economies. A huge number of people in these populous territories are coming online and spending more of their income on internationally produced digital goods.
Free-to-play titles like World of Tanks and Dota 2 have already established a strong presence in Russia and China; the world’s largest nation saw $8.7 billion in spending on subscription-based and free-to-play PC games. Brazil lags behind those countries, but it is still one of the most-important emerging markets to establish a presence in as it has the potential to generate billions in game-related revenue.