The Latin America video game market

April 9th, 2021

The revenue generated by video games in Latin America was  $5.4 billion (US$) in 2019, less than 4% of the global revenue of $135.8 billion, despite the honorable rank of Mexico and Brazil respectively in 12th and 13th position for their gaming revenues.

LatAm has a strong domestic demand in video games but it is globally satisfied by foreign (mainly American) productions. Argentina, which exported 83% of its game production in 2020 (41% to the United States and 22% to Europe), is an exception. 

The region does not produce a large number of successful games due to a lack of trained professionals, but also investment and advertising. The weakness of the Internet network also prevents the region from taking full advantage of the growing development of online games, which is one of the markets of the future. Although the rate of internet access is relatively high (68% in 2018 compared to 53% worldwide), its speed of progression is average and broadband is still underdeveloped. Argentina does have 34 million online gamers and a third of the games are downloaded, but the capacities of some countries, such as Costa Rica or Paraguay, do not always allow for easy downloading. 

However, the region has a strong potential to develop its video game industry for several reasons:

- its population is young and large: 653.9 million inhabitants in 2020, of which 32.7% are 10-29 years old, 

- the number of gamers is high: 252.6 million in 2019, more than all of North America (210 million), 

- the number of smartphone owners is growing rapidly and is expected to reach 690 million by 2024, contributing to the fact that LatAm was considered the fastest-growing digital games market in the world in 2019 with an expected growth of +11.1%. In Brazil, the number of players has grown by 28% in the last two years,

- the resulting strong growth in demand for mobile games (+50% of users from 2017 to 2020 vs. 41% worldwide) is favorable to LatAm because the production of this type of game, which requires less financial investment, is more accessible,

- Mexico and Brazil, which have one of the largest numbers of engineers in the world, are predisposed to train students in game programming, 

- above all, aware of its cultural originality and its potential, the region has been taking action since 2004 to help it gain more weight on the world stage.

In order to develop their industry, several countries organize their own events such as the BIG Festival (Brazil's Independent Games Festival) created in 2012, currently the most important independent games festival and business forum in Latin America ; the Expo EVA (Exposición de Videojuegos Argentina) organized by the ADVA, Asociación de Desarrolladores de Videojuegos Argentinos, founded in 2004, or the Argentina Game Show. Since 2016, Chile has hosted the local gaming fair BizCon and the international Festigame ; Mexico has created Los Cabos Game Weekend, whose first edition is scheduled for 2021...

In 2015, video game associations from 11 countries (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Mexico, Peru, Paraguay, Uruguay) created the Latam Video Games Federation to foster cooperation and synergies to compete internationally. They promote their productions together and make local developers aware of events, nationally and internationally. In order to gain visibility, they gather at the same booth at big events such as the GDC (Game Developers Conference) in the United States or GameScom in Germany. 

As with Internet access, there are still great disparities in the region when it comes to the game industry's economy. In 2020, the countries that generated the largest revenues in video games are Mexico ($1,901 million, 35% of LatAm), Brazil ($1,754 million, 33%), Argentina ($507 million, 9%), and Colombia ($417 million, 8%). Together, they account for 85% of LatAm's revenue. 

But between 2016 and 2020, other countries have seen their income from this industry increase significantly which proves they have already started up: Uruguay with +127%, and Chile +117%, but also Paraguay +100%, Peru +92% and Guatemala +89%, all above the world average of +80% over the period. At the same time, Brazil and Mexico, already in the lead, have seen increases of 22% and 56% respectively. 

Among the indicators that give hope for a significant development of the sector, is the fact that in 2015 Mexico was in the top 10 worldwide for the number of its engineering graduates (113,944 graduates) which makes it particularly well disposed to evolve towards STEM (science, technology, engineering and mathematics) programs, that are essential in the professions of game programming. 

In 2018, Brazil did better and entered the world's top 10 for the number of its STEM graduates (227,343), on a par with the same percentage as the United States (17.9%).

In Latin America, where the game market is large but mainly an importer, the role of schools that train for the production of video games is thus significant in providing national studios with enough professionals to increase their market share and develop their exports in this sector.

The region also benefits hugely from the presence of these major foreign studios on its own soil  with their technical and commercial experience. They focus on AAA games such as Activision Blizzard, Electronic Arts, Take Two Interactive, Zynga, Microsoft… and mobile games like Konami Holdings Corporation, Riot Games, Epic Games…