This is the fourth episode in our Emerging Markets mini-series, co-hosted with Tom Wijman, Senior Games Market Analyst at Newzoo. Founded in 2007, Newzoo is an intelligence provider for the games and eSports industries, providing data across both global and local markets.

Our guest this episode is Etienne Guebriant, Head of UA at Gazeus Games, a top gaming company in Brazil. Etienne’s been in the gaming industry for years - starting out at 18 as a pro eSport player for World of Warcraft. Listen to the podcast or skim the edited highlights. 

The history of gaming in LATAM

3:30 Etienne - “In its history, LATAM is about traditional sports. Religion and football go together here in this region. Gaming started with traditional video games related to sports like FIFA. But now with mobile, everyone’s becoming more open to gaming. You have people that started playing on mobile and say ‘okay, well maybe I can do the same thing on my computer.’ I have a lot of friends that used to make fun of me for playing games, because 10 years ago it wasn’t cool. But now it’s cool, everyone’s playing. I like to see that shift in the culture. Traditional video games first and mobile is helping the whole gaming scenario grow a lot.” 

Factors of mobile game growth in LATAM

6:20 - Tom: “In terms of growth factors, there’s the increase in smartphone users, online population, cheaper data and smartphones - which is true for every emerging market that we’ve covered in the past episodes, and it also true for Latin America. 

But there are also unique elements in the market that are interesting to highlight here. As Etienne said, traditional video games are very small when compared to bigger markets, but it was definitely there - and to put it in perspective about the other markets we’ve covered in this show, there is more PC and console gaming in Latin America than say, for example, Southeast Asia and India. 

I think part of the reason why traditional video gaming is bigger in this region than others is because culturally it’s more closely related to the United States and Western Europe. Definitely Western Europe because Spanish and Portuguese culture is a factor in Latin America, and between the United States and Mexico there’s also a connection there. For that reason, traditional video game publishers, say ten years ago, would look to Latin America before Southeast Asia or India.”

25:20 - Etienne: “For example, you take Fortnite. That was huge. People started playing on their phone. And then they started saying they wanted to get good at this, and they started playing on their CPU. If you're really going to start taking the game seriously, you’re not going to see a Fortnite player just on their phones. So mobile had a huge impact on gaming.”

The big gaming companies in LATAM

9:27 - Etienne: “There are a lot of really good small studios. The good thing and bad thing about this industry, I believe there are two sides of the coin, is that it’s a super aggressive and hostile industry. I believe less than 1% of all the apps in the store make less than $100 a month, and there are so many apps.”

10:33 - Etienne: “There are many studios but none of them really get those games that jump them to the next level. They have a good strategy, but still don’t have a big hit game that makes your company known. The other side of the coin that I was talking about, nowadays the industry has so much investment that the potential I see in LATAM from people making games, smaller studios with 4 guys, it’s amazing. The industry is not where it was a year and a half ago. But there’s so much investment that if you don’t have marketing to support your game, then your game isn’t going to get any traction whatsoever. I always say “the meta is evolving” but it’s a meta that I don’t enjoy. Because there are so many good games created by people, but they don’t have the budget to invest. And if you want to look for them in the stores, they won’t appear. 

“There’s Gazeus Games, of course. Etermax is a great company. If I’m going with volume and product, then Wildlife is also a good one. You have the guys from Iron Hide in Uruguay, they make some amazing hardcore games. You’ve got Tapps Games here in Brazil.”

Mergers and acquisitions and potential

12:29 - Etienne: “You see a lot of bigger studios acquiring smaller studios - and I think that’s going to be one of the key factors for Latin America, because again, there’s so much potential here.”

Midcore blew out of nowhere

15:18 - Etienne: “In terms of volume, if we go with DAU and MAU, casual and hyper-casual are the biggest. But then if we go for time sessions, it’s going to be midcore. In the last couple of months, I’ve seen midcore blow out of nowhere. You have Saint Seiya, which took off here in Latin America. In Latin America, it’s hard to have a game based on in-app purchase. Ad-based, then it’s all good - the eCPMs are going to be a little lower than other regions. I would say hyper-casual and midcore are both taking off in the last couple of months.”   


17:27 - Etienne: “COVID-19 also opened up the gate. All the user behavior right now, is driving all of our algorithms crazy. I’m convinced the user behavior we’re seeing right now is not going to be the same we’ll see after we’re passed all this. I don’t know where the industry is going to go, how it’s going to shift, but it’s definitely worth analyzing.”

The biggest opportunity is in IAPs

20:53 - Tom: “I agree with Etienne that advertising is easier in the sense that the players in LATAM are used to that way of monetizing. It takes a lot of effort to convince people that in-app purchases are worth it. But I think the bigger opportunity might be in in-app purchases. But that depends on the type of game you’re developing - a hyper-casual game with in-app purchases is not going to work. If you’re doing something in the midcore/core segment, then in-app purchases is the biggest opportunity because there’s so much room for growth.” 


 22:37 - Etienne: “Brazil is by far the most developed country in Latin America regarding eSports. Whatever scene you’re looking at, there’s always going to be a Brazilian representative. For example, Counter Strike, I believe Brazil has one of the best teams out there. League of Legends also. There’s also a tendency towards different regions and how they perform. For example, if you take Latin America, then shooters and FPS have a tendency to grow here. But strategy games like League of Legends and Auto Chest, are not as big as other regions. In Brazil, you go to a bar, and you see eSports on the TV.” 

Tips for LATAM in

24:43 - Etienne: “If you’re going to go into Latin America, you need to be sure of two things. First, your Android version is good. And second, the version you’re going to develop for Android is also able to be used by everyone - not only high-end phones. So you need a version that’s either lite. 

It’s all about monetization

27:48 - Etienne: “I always say that LATAM is the guest you invite to the party who’s always late. You see it in any industry. I definitely see that we’re catching up and I see people starting to realize that LATAM is not only a region to do soft launches. What’s missing here is the right monetization strategy. Doing UA, CPIs are super low if you compare to other markets like the UK, Australia, US, Japan - so LATAM is a great country to test. But if you’re able to build and really monetize your product in the region, then it’s a goldmine. It’s just a matter of choosing the right strategy for the right region. 

There’s always going to be an economic crisis in the vast majority of the countries here. So you can’t put the same prices your game has in the US. You really gotta think and see which games are blowing up in in-app purchases, and really compare the prices. And ads - like Tom mentioned, in-app purchases aren’t really that big. They still haven't gotten to the party. So try to build ads and new placements. Then you’ll see the real potential of LATAM.”

Look at LATAM as one market … sometimes

30:52 - Etienne: “If you’re building a games strategy, then look at LATAM as a whole market. If you’re looking into campaigns and creatives, then no, go by country. If I want to do a campaign in Peru or Argentina - yes, they’re both Spanish, but it’s a completely different dialogue. The changes we’ve seen when we’re localizing our creatives is amazing. I’ve seen 30-35% CPI reductions just by using the right words, or communicating like locals do. 

But in terms of the monetization strategy, look at LATAM as a region because the eCPMs are very similar. Brazil and Mexico have the highest eCPMs of the region, but only by a small fraction, and it’s because they have more brands invested in those countries, and those countries are better off economically than the others. But the behavior of the users is pretty similar.”

Think and analyze the market

33:03 - Etienne: “Think and analyze the market. I don’t see people are analyzing the market enough. The same way the other regions look at LATAM and say they’re going to test the whole market, LATAM does the same thing with other countries. LATAM says, ‘that country is tier 2, the CPI is $2, and we have the creatives in their language, let’s go with it.’ You don’t want that to happen. You want to analyze the market - what are the types of games out there? What are on the top charts? Where are the top sessions spent? What’s the user behavior - is it IAP, ad-based, hyper-casual, midcore, western? It’s a multiple factor equation, and you really want to put everything there to increase your chances of success by at least one point higher. Just play every game that’s similar to yours and analyze it. What are their top 10 markets? Why?”

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