The market of online games is constantly expanding in size and in preference among online users. And mobile platforms are protagonists in this landscape: by the end of 2018, over half of the sales volume of this market will be generated through mobile devices.
Such market growth data can be seen in the 2018 Global Market Report, conducted by Newzoo’s intelligence department. The document also shows that, this year alone, the total amount of online players worldwide is expected to reach 2.3 billion people, spending around 137 billion US dollars.
In fact, the value of this industry increased 13.3% over last year, which was boosted by the 25.5% increase in revenues from mobile devices, totaling 70.3 billion US dollars. A closer look shows that smartphones account for about 80% of mobile devices, with tablets complementing the remaining 20%.
Despite the fact that mobile devices are taking over, computers still represent a considerable portion of online games consumption. Big players bet on all platforms. Take for example, Valve, owner of Steam, the largest game distributor in the world: they are investing in the launch of games for PlayStation 4, Xbox1 and computers.
According to Newzoo, this will be the first year that mobile revenue accounts for the majority of the games industry. When it comes to other devices, the use is divided almost equally between consoles and computers. The report shows that consoles’ revenue is approximately 34 billion US dollars, a share of 25% of the total amount spent on games, while computers make up with almost 33 billion US dollars.
Looking ahead, Newzoo expects the industry to continue growing at double digit rates a year with a Compound Annual Growth Rate (CAGR) of 10.3%, and a revenue of approximately 180 billion US dollars by 2021.
Latin America and the games world
When we take a look at the Latin American local online games market, we see that Latin America is also in line with the rest of the world. Here, year-on-year growth registers a positive rate of 13.5%, with a revenue of 5 billion US dollars, behind only Asia.
If Brazil was dominating the local market back in 2013, now it’s Mexico‘s turn: it is the 12th country in the global list of countries that generate the most revenue in online games, with a share of 1.6 billion US dollars in the last 12 months.
Between 2017 and 2018, the revenue of the online games market in Mexico increased 200 million US dollars. The percentage increase in Mexico’s rates almost doubled between 2016 and 2017, when the index was +8.4%, which is almost four times higher than the country’s GDP of 2.2%.
Regarding preferences, Mexican players are divided this way:
- 66% play on smartphones
- 34% play using consoles
- 11% play on tablets
- 10% play in computers
- 2% play using portable consoles
When it comes to age, there are 3.7 million Mexican players over 50 years old, 10 million of the generation X, 13.8 million millennials, and 29.7 million of generation Z. Generation X leads the ranking of online game consumption, followed by generation Z.
Argentina is in third place in the list of market shares of Latin American countries, accounting for 423 million US dollars. When you analyze the growth in previous years, it is possible to see a clear tendency of consumption increase: between 2014 and 2015, for instance, sales jumped from 124 million US dollars to 300 million US dollars.
Last year, there were over 180 game development companies in the country, ranging from individual professionals to companies with more than 200 employees.
In Argentina, 72% of online game players are men and 28% are women. Pure fun is what moves 60% of these people, whereas 40% say they also look for competition. The monthly average ticket per player is 49 US dollars.
Another major player in Latin America is Colombia. Fourth in the list of the largest regional markets, it has a revenue of almost 300 million US dollars. Colombia has over 50 game development companies. No less than half of Colombians play with consoles or smartphones.
The Argentinian government itself is one of the supporters of this industry. Through the call “Videojuegos: conectando a la industria“, or “Videogames: connecting the industry” in English, the country injected 1.5 billion Colombian pesos into the financing of national games and stimulated the participation of both small and big companies.
Among the online game consumers in Argentina, some of the most interesting data is that 44% play it as a hobby, 11% say that games are part of their social life, and 24% play to relax and to disconnect a little from the real life.
Why do Latin Americans buy things when playing online games?
In addition to the reasons about the game consumption profile in Latin America, other associations can be made when we think about what makes an online game player to put money in online games. If you remember how games were back in the days, you will realize that the possibilities were already being set.
For instance, now most games come with some blocked levels, which can only be accessed if the player buys stuff. A fan will want to have the full experience, so they will pay for features. The very meaning of games is to go through all the phases.
Today, customization has no limits, especially for those willing to pay for it. For example, there are games that can be played for free, but in order to have access to the best features, the player can choose between different paid plans, including annual subscriptions. Take a look at the character creation of Shavone Scales on this YouTube video:
Generally speaking, the biggest incentive for players to actually decide to spend money on the game is to have access to benefits in a more agile way. In this case, DLCs (downloadable content) are a great thing, being extra content that users can buy and that will make their experience more complete.
DLCs can be phases, new maps, original customizations, and other items. There are a multitude of things that can be downloaded and this is one of the main ways to stimulate new purchases. People believe that allowing users to have an online game that looks like them increases the chance of bond creation.
About payment methods
If you have an ecommerce of online games, be sure to consider the importance of local payment methods for Latin American customers.
There are two key points that have influence in how a Latin American customer will pay for an online purchase: international credit card penetration, which is low in Latin America, and the fear of online fraud, which makes so many users to avoid providing their card’s data online.
This is why offering cash payment options or transfer methods is so important in order to reach a much larger portion of the population. Take for example Colombia, one of the most promising countries for the online games industry: only 26% of consumers have a credit card.
In cases where cash payment is very popular, betting on a monthly subscription system may be the solution, just like Eve Online. Consumers can either choose to pay for one month, three, six or for the whole year. And, if the store offers local payment methods, even better. This way, consumers will know they have the option to pay with Vía Baloto in Colombia, boleto bancário in Brazil, and OXXO voucher in Mexico, for instance.
Technology and competition
Another very discussed topic in the world of online gamers is related to the technology used to play. Some people prefer the convenience of buying a console, there are those who choose the possibilities of customization of the machine and bet on specific computers for games.
In the international market, a console like Xbox One X costs 500 US dollars, followed by alternatives like PS4 (300 US dollars) and PS4 Pro (400 US dollars). When it comes to computer, the budget varies according to what the user wants to put on their machine, but a computer specific for playing online games can cost around 800 US dollars.
As far as ecommerce stores, one important issue is that console games can only be purchased on proprietary platforms such as PSN or Xbox Live or via physical copies. In the case of computers, options are much wider and it is good to know references like EA’s Origin or Humble Bundle. There are also the so-called “gray markets”, such as G2A and Kinguin.
And last, but not least, you need to be aware of country-specific legislation in Latin America if you intend to expand the reach of your online games business in the region. Consult the local regulatory entities in each country you want to expand to and make sure that your product follows all legal recommendations.