Video Games in Latin America

November 2018

Latin America is starting to see recovery in its video game market, as years of slow growth caused by economic and political issues in the region subsided somewhat in 2017, allowing new consoles and mobile gaming to expand once more. This recovery, however, is very fragile, and video game players will need to be cautious, especially as the region continues to favour new titles from small companies in mobile gaming.

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Key Findings

Latin America sees fragile recovery in video game market

Following years of slowing growth, brought about by economic and political issues in the region, sales of video games in Latin America started to experience a slight recovery in momentum in 2017. The recovery was brought about as some of the biggest issues plaguing the region started to subside, and new consoles hit the market to encourage sales. This recovery is being led by Brazil, but the major markets of Mexico and Argentina also contributed to the rebound.

Software leads sales but hardware could see gains as import restrictions are lifted

Video games software was the fastest growing area of video games in 2017, as mobile gaming continues to gain considerable ground in the market. The rapid proliferation of smartphones is a major reason for this, as is the growth of free-to-play games that offer a no cost entry into gaming. Hardware sales continued to lag behind, as the Switch had a limited impact; however, many markets have started to ease import restrictions on consoles, which could help the market in the near future.

Top companies losing share to new mobile upstarts

Hardware manufacturers led sales throughout the review period, but they and other major software publishers, saw significant erosion of share over the period. The loss of share was not entirely due to sales declines, although some companies did see sales fall. Instead, it was the rapid growth of new players in mobile and online gaming that took away so share. These companies typically only have one game in their portfolio, but grow so quickly they impact the whole market.

Economic recovery a necessity for long-term growth in video games

Brazil is expected to lead absolute growth in video game sales, but all major markets, including Mexico and Argentina, are expected to see a rebound. This could lead to the adoption of new products, such as next generation consoles and VR. This recovery is, however, predicated on economic stability in many of the key markets, which is by no means certain, and any major political or economic upheaval could once more push the market towards the weaker growth it witnessed over 2015-2016. 

Introduction

Scope
Key findings

Regional Overview

Putting Latin America into context
Latin America video games see weak recovery as economic issues linger
Brazil becomes the largest gaming market
Video games software remains key driver for the industry
Hardware fails to make an impact despite the switch
Import costs and economic issues shaping game growth
Mobile gaming driving non-store retailing growth
Key channel activity for video games in Latin America

Leading Companies and Brands

New games taking most of video game market share
Large companies mostly see share declines
Only Sony has a major presence across markets
Brands very volatile outside the top four

Forecast Projections

Growth moderates as impact of new consoles could be limited
New technologies can have an impact if economic recovery persists

Country Snapshots

Argentina: market context
Argentina: competitive and retail landscape
Brazil: market context
Brazil: competitive and retail landscape
Mexico: market context
Mexico: competitive and retail landscape
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