Huge Growth Potential for the Game Payment Solutions Sector in Brazil

Interview with Glaucia Gregio, Director of E-Prepag

Could you give us an overview of the game payment solutions sector in Brazil?

The Brazilian game payment solutions sector is in its early steps in Brazil. The payments are related to game credits, which are used to buy virtual items or special abilities within the game, so that players can have more fun.

Despite being a very new market, Brazil corresponds to half of the Latin American market for game credits, and it is expected to double by 2016. This year it is expected to grow more than 40%. We are facing a very special moment.

For payments specifically, Brazil has some characteristics that may differ from other countries. For instance, a very important feature in the Brazilian market is that almost half of the Brazilians over 15 years old don’t have bank accounts. We have an under banked population that wants to have credits for their preferred games and, in many cases, they do not have access to a credit card, as it happens in other countries. That is related to one of the main success factors of E-Prepag. We offer to our users not only credit card, “boleto bancário” and the bank transfers, but also more than 50,000 points of sale all over Brazil, including supermarkets, cyber cafes, small stores, big stores, bookstores, newsstands, to enable gamers to pay using cash or another method of payment available at the point of sale. It makes it much easier for the gamers to buy credits for the games they love.

We also have some challenges that we are trying to overcome. The Brazilian tax law is very complex and heavy on the companies. These laws are very old: many of the laws are still from the 50’s and the 60’s. When you are faced with the problem of adapting this old tax law to a niche that is dynamic and competitive, it makes life a bit harder.

Another big challenge is infrastructure: we still have some regions in Brazil without good internet service. Half of the Brazilians still do not use the internet. There are, of course, some improvements that have been achieved these last few years but, for a dynamic and competitive sector, these changes are happening at a slow pace.

The sector is booming and we can assume it will be completely different three years from now. What is your vision for the coming years?

All the researches and studies about the gaming sector in Brazil are optimistic. The specific studies for the game credit sector predicted that this niche would double in two years. If we compare the participation of the game market in the GDP in Brazil with the average participation of the sector in the GDP in other countries, we see that Brazil could grow five times more. There is a lot of potential in the long term. The companies here have to understand and meet the needs of the market, because it has some special characteristics.

There is another aspect in the Brazilian game sector, not specifically related to payments, that is booming. It is the training of new professionals for the sector. Nowadays there are very few professionals in the game sector in Brazil, but the ones that exist are very talented. There is a new generation of professionals in training and they will be eager to have the opportunity to work in Brazil or abroad. The creativity of the Brazilian people will help the new and the current professionals to be successful in the challenges they will face.

The training schools for professionals in the sector are very recent in Brazil and they will provide the market with a workforce that will make the sector grow.

We cannot forget the smartphones market that is growing in Brazil. Last year the smartphones sales doubled, although they represent just half of the total of the cell phones sales. This market will bring huge opportunities in terms of games and apps.

What would be your advice for those that wish to enter the game development market in Brazil (or even in your segment)?

The first thing you have to do is to try to understand the market and to try to find the best partners here. Even if someone is coming without any established partnership, good lawyers and good staff should accompany him/her. I have heard from an international executive in the gaming industry that many companies say that they will come to Brazil and that they will thrive here, but he said also he was hearing too many speeches and seeing little result. The Brazilian games market is very new and very challenging for us that live here, so it is much harder for people that come to Brazil and do not know how the gamers react, what they want and what their needs are.

My advice for those who want to invest in Brazil is: be sure you have the right partners here or that you understand the market very well. Continue reading…

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