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Brazil: New Consoles Have It All To Play For

Brazil: New Consoles Have It All To Play For

Mon 28 Oct 2013 10:47am GMT / 6:47am EDT / 3:47am PDT
BusinessPublishing

It may have the cheaper console, but Microsoft again fumbled its marketing message at the Brasil Game Show

You'd be forgiven for thinking that Brazil is purely a console market when well over half of the floor of this year's Brasil Game Show is dedicated to next and current generation hardware.

Despite the astonishingly high prices for the next generation consoles - the PS4 will be priced around $1,840 when it launches on November 29, the Xbox One $1,012 a week earlier - the hunger for new technology here is as palpable as it is in the European and US markets. Import tax may be assaulting the consumer's wallet, but even in this price-hostile environment surely we can finally bury the idea that consoles are in any way doomed because tablets and mobile hardware are more popular.

It's an understatement to say the Brasil Game Show is big. The numbers do the talking. Over 150,000 people are expected over four public days here. That's not close to Gamescom's whopping 340,000 attendees but it's closing on ChinaJoy's 200,000. It's already bigger than Eurogamer's EGX in the UK and Penny Arcade's PAX in the US. To refer to it as an emerging market is offensive.

"Microsoft's booth looked barren, with new technology in sparse supply. All green branding but no jet black hardware"

When Sony first announced the price of the PlayStation 4 in the region it looked like the hardware could be dead on arrival. With crippling import taxes accounting for 61 per cent of the mark-up, commentators saw an open goal for Microsoft, with the Xbox One at a much less expensive, but still considerable price-tag. Surely the Brasil Games Show, with its huge audience, would cement that theory.

But when the show opened on day one for the press and business crowd, there were only a handful of Xbox One consoles playable. Microsoft's booth looked barren, with new technology in sparse supply. The space had been reserved, but the technology was missing in action - all green branding but no jet-black hardware. Forza 5, one of the system's most prominent launch titles, was only present with a trailer and a promotional Mustang. Having your photograph taken with a cool looking car is fine, but it's nothing compared to 20 minutes playing the latest build. Microsoft staff stood around twiddling their thumbs instead of Xbox One controllers. The single Xbox One game playable on the opening day was Killer Instinct. What on earth forced the decision to go with a rebooted fighter over the company's flagship racing game?

1

Microsoft's booth looked anemic, all TV screens and missing games consoles.

The situation wasn't any better for Microsoft's third-party exclusives either. I can't imagine Capcom or Crytek were happy with Dead Rising 3 and Ryse's screens showing common trailers with empty boxes underneath. The space wasn't even asking for a lot to fill it - just five units per game - but Microsoft just couldn't deliver. Fill that space with something, anything. Nothing looks worse than empty shelves.

Granted, this was on day one, where no public were allowed through the doors. But this was the day to get the message across through invited press, the media, bloggers, the YouTube broadcasters and the national TV, as well as the day to impress Microsoft's industry peers. Unfortunately for Microsoft the message was fumbled badly, a huge missed opportunity only weeks before launch.

The second day was a little better for Microsoft, with a few more Xbox Ones installed on the booth. But it really was only a handful - there was a demo of Kinect Sports Rivals running on just a single machine, and Forza was blessed with three working consoles. Three! But again, there were no consoles for partners. I'd imagine that the developers of Ryse and Dead Rising 3 were rightly pissed that their exclusives were all but abandoned in front of tens of thousands of consumers.

Sony's stand, on the other hand, painted a clear picture of a company ready to launch in just over a month. Killzone: Shadow Fall had the biggest presence and the crowds to go with it, but none of the smaller games were sacrificed in favour of first-party, or the idea next-gen has to be about AAA. It's a policy that's proving strong for Sony in other regions, and it's no different here. Octodad, Contrast, Knack, the delayed Drive Club and even third-party games Assassin's Creed: Black Flag and Blacklight Retribution were all shown and received love. Add to that an embarrassment of riches for the Vita and PlayStation 3, including Angry Birds, Diablo III, The Last of Us, Diggs Nightcrawler, Batman: Arkham Origins Blackgate, and Sony had all bases covered. In contrast, Microsoft's Xbox 360 section on the show floor featured nothing new at all. Having Gears of War: Judgement and Halo 4 playable just seemed to highlight that there are no Halo and Gears titles due for the Xbox One any time soon.

"Having a cheaper console than your competitor isn't an advantage if people can't sample the games"

If the absence of new Xbox One consoles was only a problem with day one, the press would have walked away unable to evangelise the games. For it to happen on day two as well, that's the consumer walking away disappointed when they should have been topping up their savings jar in anticipation. Having a cheaper console than your competitor isn't an advantage if people can't sample the games and experience the hardware.

But Microsoft's fumble in the market took nothing away from the general excitement and vibrancy of the Brasil Game Show. It's relaxed and welcoming, with even the most stuffy of execs undoing the top button and going with the flow. Call me a hippy, but this was one of the most welcoming video game shows I've ever been too, and I'm a black-hearted cynic who's been traipsing around soulless exhibitions centres for the past 13 years.

With publishers clearly lifted by the next-gen rising tide, console gaming is back like it never went away. It seems that even the willy-waving of days gone by has been put to one side. Electronic Arts and Warner Bros. had teamed up tactically to share booths at BGS, so Need for Speed and Battlefield 4 sat comfortably alongside Dying Light and Batman - a cosy partnership that didn't look out of place. Maybe Warner Bros. should consider buying EA and take their game up a considerable notch.

EA's other booth - dedicated to FIFA 14 - was rammed, as you'd expect from a nation that worships football. Konami's Pro Evolution Soccer series was all but pushed out with only a minor showing on a partner booth - odd when you consider how much more popular PES is in Brazil, making Konami the most successful console publisher in the region.

Elsewhere, Ubisoft had impressive branding for the recently-delayed Watch Dogs, but the game was only demoed behind closed doors. Instead, its two booths were dedicated to Assassin's Creed: Black Flag and the ubiquitous Just Dance. Assassin's Creed was even running openly on PlayStation 4 dev kits, which either showed a relaxed approached to presentation or someone didn't get a memo.

It's also telling that the first bunch of ticket holders who arrived 24 hours before the show to begin queuing were dressed in Call of Duty t-shirts. What gaming show doesn't have a passionate, vocal and borderline uncontrollable Call of Duty tournament? This year Call of Duty: Ghosts goes up against Battlefield 4, another booth that was swamped with itchy trigger fingers and backwards baseball caps.

"When League of Legends starts broadcasting every other booth looks on in quiet envy. This is a game that sucks the air out of the room"

Was BGS purely a console show? Not at all, but the more local companies, the smaller tablet developers, and the usual technology and peripheral manufacturers occupied a support role this year. Kingston, Razr, Corsair, Intel and Nvidia relied as much on hotpants and freebies to draw attention as high-end PC gaming favourites.

At least one company was conspicuous by its absence. Wargaming didn't have a presence at Brasil Game Show, which is surprising when you consider how ubiquitous the World of Tanks business has become, associated with domination in free-to-play and a fearless advance across new territories. But this is one territory not yet on the map in Viktor Kislyi's war room, or at least the invasion is on hold until those difficult Brazilian bureaucratic business issues can be dealt with.

But where Wargaming might not yet feel comfortable, another free-to-play giant dominated it's own chunk of the show floor. Riot's League of Legends stretched out across three stages with a tournament, presentation and rock band bringing the ruckus. And when League of Legends starts broadcasting every other booth looks on in quiet envy. This is a game that sucks the air out of the room, with surrounding booths busy simply because the crowds can't physically get any closer to the party.

So Brasil Game show is a raging success, mirroring the big bucks and pumping pulse of the console business in 2013. It's clear that if you haven't got a presence in Brazil, you're missing a huge market. And just like the console business in 2013, there's still the impression that Microsoft isn't nearly as prepared for the next generation as its competitor, despite some distinct advantages. The company has done a lot to rebuild its marketing image after the clumsy Xbox One reveal at E3, but it has to work hard in every territory it's launching in, not just the ones in which it feels the most comfortable.

We'll have more from the Brasil Game Show this week, including a look at how US and European businesses are attempting to expand in the market, and an interview with Brazil's biggest video game development studio.

14 Comments

Seriously, Microsoft? How can you screw up this hard when Sony is actively trying to help you by pricing their hardware almsot double that of yours? Maybe MS is feeling bad about PS4K and wants to try and even the odds?

Posted:A year ago

#1

Nick Wofford Hobbyist

180 190 1.1
Or MS just isn't worried. Brazil is to MS as Japan is to Sony; I don't think MS is worried at all about that region. We're not talking about $100 price difference: this is $800 here. If the X1 plays FIFA, then it'll sell in Brazil.

Posted:A year ago

#2

Nick Parker Consultant

302 179 0.6
According to some respected sources of the state of play in Brazil, PS3 has double the installed base of the Xbox 360 so a strong brand awareness and loyalty which would assist sales of PS4. I'd be interested to know why there is such a discrepancy between PS4 and Xbox One retail prices.

Posted:A year ago

#3

Nick Wofford Hobbyist

180 190 1.1
@Nick Import taxes. Sony doesn't manufacture the PS4 in Brazil, so it pays import taxes to be sold there. A lot of Brazilian commenters online have mentioned that the X1 is also not manufactured there (the 360 definitely is), but my Googling hasn't turned anything like that up. It's a popular comment from people in the country though, so I'm curious.

Also, what sources on Brazilian market share? Last I heard, I thought the 360 was like 80% of Brazilian console sales.

Posted:A year ago

#4
I believe the 360 has a larger user base because piracy. With games costing upwards 200 monies (around 160 for the cheaper releases nowadays) piracy is the mainstream of gaming in Brazil, even nowadays, I believe. So easily hacked consoles (PS2, 360, Wii...) always end up being WAY more popular.

Posted:A year ago

#5

Nick Parker Consultant

302 179 0.6
@Nick One of the sources of installed bases was a report by IDG. Xbox 360 leads in Mexico by a long way but not in Brazil apparently?

Posted:A year ago

#6

Marcel Tau Assistant Producer, EA

1 0 0.0
As it has been mentioned, the biggest reason for the high prices on PS4 are the import taxes.
Microsoft has confirmed that the XONE will be manufactured in Brazil, hence why they can be 800 USD cheaper.
However taxes are not only problem, extremely high margins for the entire pipeline also contribute another ~25% to the price hike.

The 360 does have a larger user base in Brazil (last study I saw from eariler in the year pointed xbox 360 is 85% of the market), thanks to the piracy and the lower prices. For many years the PS3 was not offered through official channels and costed upwards of 1k USD, combined with no pirated games no one was buying it.

Posted:A year ago

#7

Nick Parker Consultant

302 179 0.6
Thank you Marcel and Nick - so if the source I read had PS3 at twice Xbox 360 for official boxes, could all the piracy be hitting primarily the 360 which is why you have a dominant position for the 360?

Posted:A year ago

#8

Nick Wofford Hobbyist

180 190 1.1
@My fellow Nick :D
Yeah, that's probably it. Stuff is just too expensive at retail in Brazil for them to buy it full price. From my Brazilian friends, it's a culture thing. Rich people in the country like the prices because it screams luxury if you own one. So games are just never going to get cheaper in the region (unless digital brings in some standardized pricing around the globe.)

Posted:A year ago

#9

Marco Antonio Rocha Lima Systems Enginner - Workin as Qualit Assurance Coordinator

9 0 0.0
Hi, im Brazilian i Have XBOX 360 and PS3 so many friends of mine have XBOX 360 and a few PS3. I only use original games no piracy on both consoles.
1- XBOX 360 is better. The GUI, the Live Network and the rendering result on most games are better than on PS3. The xbox joystick is better to handle with.
2- None of my friends have a XBOX 360 that has been modified to use piracy. We only use originals.
3- Half of my Friends as i know use piracy on the PS3. :-( I dont like Piracy.
So, you are wrong. All do prefer XBOX 360 because it is better. So the motivation for buying a XBOX 360 is not piracy.
SONY has made a shot in its own foot. The price is abusive. May be, XBOX ONE will win the battle.... Microsoft is stronger... Im not a fan boy. I like both consoles, but what im trying to say is that the marketing is getting Wrong here in Brazil. PS4 looks to be a good console, a little superior on Game Processing but not a notable diference... In the other side, XBOX ONE is like a complete multimedia center and at the same time a good Game Processing System. So... games will resemble on both. May be i will buy the two next generation consoles, but i will buy XONE first.

Edited 2 times. Last edit by Marco Antonio Rocha Lima on 29th October 2013 4:07am

Posted:A year ago

#10

Tim Hull Co-Founder, Stuntpigs Ltd.

24 2 0.1
Whilst Marco and his friends are commendable for purchasing original rather than pirate content, there is a heinously widespread pirate community, or rather I should say it's the norm. At any market place, busy street corner you'll find a stall with knock off DVD movies, games and productivity software with the very latest on offer. These street sellers can shut up shop in seconds and often have wind of any police bust ahead of their arrival.

AAA Developers best bet for ROI in Brazil is probably DLC. The punter can buy a bogus disk but needs to payup for the DLC.

Posted:A year ago

#11

André Gomes de Oliveira C++ Programmer, Funcate

9 7 0.8
I honestly don't think the Xbox One is in any trouble here. Everyone who is interested in games here already knws the price difference is huge and the most popular games here will be released for the Xbox One. Sony can't possibly win this war, at least not yet.

That being said. Several people that I know are already wandering which console will allow pirated games first, so whoever gets that "feature" will eventually win by a landslide.

Considering Sony's price announcement and the price of console games (which is twice that of pc games), I can't say I blame them.

Posted:A year ago

#12

Jeff Kleist Writer, Marketing, Licensing

379 227 0.6
@andre

Pretty much. I wonder how long x1 would have stood on the original system. As it is they're going to be a lot more capable and active to patch holes that make modding possible this go on both sides

Posted:A year ago

#13

Marco Antonio Rocha Lima Systems Enginner - Workin as Qualit Assurance Coordinator

9 0 0.0
I Agree with you. DLC are the best way in this case, may be im a rare buyer and my friends too. But i can afirm that who buys XBOX 360 and its games buys it because the rendering results and playability are better on the games that have versions on BOTH consoles. Its noticiable the little better image quality on XBOX 360. I can say that withou any doubt i have this games on both consoles ( Battlefield Bad Company 1, BFBC 2, BF 3, Modern Warfare, MW 2, MW3, Call Of Duty Black Ops, Crysis 1, Crysis 2, Unreal Tournament, Mass Effect 2, F1 2010, F1 2011. Besides that, PS3 has a easier kind of Piracy type because its just a pendrive to crack it, But as i said i doesent agree with piracy i use computer since im 12 now im 47 and know many programming languages and microprocessors assembler like 8bits, 16bits and 32 bits. Have programmed in assembler for 8080,8086, Z80, 6502, 65C816, 68000, 68040, I286...I486, Pentium I,II E III and C, C++ are my prefered languages. Today i dont make programs but i know if i can i will program as the best programers that exists today. I konw rendering, computer graphics, sound programming, game programming, phisics, AI, mathematics, game design, texture creation, 3D Scenery Maps creation, quality assurance etc. And im a gamer too. I respect all game programmers and i know the investment is worth the risks when you have a good game on the way. You know that!, How about the recent GTA V... the big numbers! The ROI on GTA 5 supasses any Priracy. Than, piracy its a piece of the total copies, but the people who consumes piracy in many ways does not has the money to buy a new game. You could not count on this but with the real buyers that populate your revenues statistics. No one is crazy to produce games without knowing that there will be buyers! Sorry about my english, hope you understand what i wrote. I dislike piracy! You bet! I think PS4 will have a better result in real time CG rendering with a little better resolution on games, but i dont think the difference will be the decision on buying it. The diferenc will be the service, the network quality and if XBOX one will use the Cloud Infraestruture to do some processing... the escalability will be better.... may be... I really think there will be two good consoles, but i think Microsoft make a little mistake with the architecture ou power processing. But just a little. BEST REGARDS FOR ALL GAME INDUSTRY AND CONSOLE INDUSTRY... ALL GAMERS WILL BE HAPPY!

Edited 2 times. Last edit by Marco Antonio Rocha Lima on 31st October 2013 2:32am

Posted:A year ago

#14

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