There is no debate about the gaming industry’s tremendous growth over the last decade. Fast connections, the evolution of graphic design, and a massive fanbase created the environment for it to become a substantial sector — especially in regions like Latin America, which is seen as a key market for companies.
The Latin American region is building a prominent role in global numbers. It represents a market with more than approximately 260 million game players and expects to obtain more than USD 3.6 billion in revenue by 2023, according to the Newzoo Global Games Market Report 2020. According to Statista, Mexico and Brasil lead the revenue gain with U$ 1.9 billion and U$ 1.75 billion each in 2020, more than three times the generated by Argentina, the third biggest market.
What was the reason? The pandemic played a significant role in accelerating online gaming in Latam; a study released by Newzoo predicted an increase of 10% in live-streaming audiences in 2021 over the last year – reaching 728.8 million people. With COVID 19 and its social restrictions, people turned their time and attention to the screens in an attempt to disconnect from the outside world and engage socially with their peers.
The gaming market is already larger than the entertainment and movie markets
Current studies point out that online gaming is currently responsible for more than half of the entertainment industry’s value, larger than the cinema and music markets combined, according to IDC data.
The number of gamers worldwide is estimated to be more than 2.5 billion people, one-fifth of which China represents. With that holding a total value of $177 billion in 2020.
Potential: Choosing to invest their time and money, gamers will move a large amount of money in the next few years. Experts estimate the number of online game streamers will grow to one billion by 2025, equivalent to one in nine people this year and that this market could reach $3.5 billion by then.
Online gaming in Latin America: a prosperous market
Even though Latin American countries are still on the road to build modern networks and provide a stable and fast internet connection to urban and rural places, around 58% of the online population are playing mobile games. A meaningful context to understand why and how this market is rising exponentially.
With strict import laws and high prices for consoles and gaming PCs, the mobile game model finds a bigger audience and reaches a larger public. The segment already represents 48% of gaming revenue and projects to have over 351.9 million smartphone users in the region by the end of this year.
With wider access to mobile devices and improved connectivity, this category is where gamers are more likely to spend money, and developers have more opportunities to acquire loyal and frequent users that become buyers. The Newzoo report shows that the most popular virtual good is in-game currencies, being purchased by 43 per cent of the players.
According to Headway Digital, the mobile gaming segment will take over 50 per cent of the market. Overall, the Latin American market is considered to have the most engaged amount of users, both male and female.
Largely dominated by the freemium or free-to-play business model, the Latam market has an organic way of creating a solid customer base, established with word-of-mouth, referral network, and search engines. According to Market Watch, this model accounts for 39% of the total.
The totality of the scenario helps to explain how Mexico and Brazil occupy 12th and 13th place in the global ranking of games revenues, demonstrating the potential of this region. Their expenditure grew an average of 50% during the pandemic, with a 10.5% CAGR rate growth expectation aimed only at the mobile gaming market between 2021-2026.
This growth does not come by any surprises. With this new reality imposed by the pandemic, gaming is more democratic and also customer-centric. Every point of access with a company can create a loyal evangelist or make him look for another option.
Especially when consumers are more aware of the type of experience they want to have and experts about online purchasing. A scenario that combined with Latin America’s different payment systems creates a challenging and yet prosperous market.
So, keep this in mind: developing a transparent and easy process is very important when expanding the operation to Latin America. That is why accepting local payment methods, and local currency can help eliminate barriers, build a positive relationship with the customer, and increase revenue.
BoaCompra can help you expand your business to Latin America with a one-stop solution for accepting local payment methods and local currency. Click below to learn more about how we can help your company: