In the last three years, the creation of Uruguayan video game companies has grown by 100%. In addition to this figure, which comes from a study by the Ministry of Industry, Energy and Mining (MIEM), almost 10 million downloads of local games have been registered in recent years.
In December 2016, the second edition of Gamelab MVD, one of the most important international meetings of the video game industry, was held in Montevideo. It was organised by the National Telecommunications Directorate (Dinatel) of the MIEM, Antel, Uruguay XXI and the recently formed Uruguayan Chamber of Video Game Developers (CAVI). Uruguay is the first and only Latin American country to host such a forum, bringing together entrepreneurs, innovators, developers, fans and leading exponents of the sector.
Among the international participants at the second edition in Montevideo were Richard Lemarchand, leader of the famous "Uncharted" saga for Playstation; Matthew Steinke, responsible for the award-winning "Splinter Cell" and "The Witcher 3" and actor and producer Jon "Neverdie" Jacobs, who anticipated the value of real estate in video games and raised millions of dollars. There were also regional speakers such as Máximo Cavazzani, creator of "Preguntados", and Pablo Realini, co-creator of the successful "Kingdom Rush" saga from the Uruguayan studio Ironhide. Invited by the French Embassy in Uruguay came Yoan Fanise, a professional with more than ten years of experience at Ubisoft and a key factor in famous titles such as "Rayman: Raving Rabbids", "Assasin's Creed Brand: The Naval Battles" and "Valiant Hearts".
Gabriel Vainsencher, secretary of CAVI and director at Golden Bite Games, told Búsqueda that Gamelab was important for the amount of knowledge shared by international professionals. "As a positive aspect, it also served to formalise CAVI, something that we have been working on for a long time: an important achievement for us as it is to have a framework that encourages and supports the interests of video game companies," he said.
Vainsencher's company develops its own games and games for third parties. "We are working with Plan Ceibal on a video game called 'Runnedrez' (to be released in March) that teaches chess in a much more fun way, to the point that the child never even realises that he or she is actually playing it," he explained. They have also made video games for Cartoon Network and recently won a call to create a video game for the Uruguayan Football Association that focuses on the positive values of football to transmit to children. "It's a challenge for this time in society with violence in sport," the developer said.
Vainsencher highlighted the changing nature of the market, with new gaming experiences and innovative business models. "Ten years ago, no developer would have thought of selling their products for free, with in-game purchases or monthly subscriptions. He explained that the market has changed a lot and, for example, paid games for mobile devices have lost ground, although there is still a niche for that market.
"Global trends are increasingly moving towards improving artificial intelligence (even outside video games). In addition, game designers will be able to create game systems for any field, such as education, medicine or even to encourage environmental care. I hope that in 10 years a much more playful learning system based on video games will be normal in education. The reality is that there are no limits in this industry," he said.
Expanding
Spaniard Iván Fernández Lobo participated in Gamelab and is familiar with the Uruguayan market because he worked as a consultant for the development of a strategic plan for this industry. "The global video game market reached $100 billion in 2016, with an expected annual growth of 7%," Fernández Lobo told Búsqueda. "But more important than these figures is that the gaming business model continues to expand and will generate additional revenues in the coming years, coming from the generation of content by users, eSports, gamification (use of game mechanics for non-gaming applications) or Virtual Reality," he added. It is estimated that by 2019 the global turnover will be almost USD 120 billion.
The Spaniard said that in Uruguay there is "a good technical and creative base" and "an excellent climate of collaboration between companies", which influences "the sector to function as a single project incubator". The specialist explained that the arrival of Gamelab in Montevideo and the growing presence of Uruguayan companies in international events have increased the international visibility of Uruguayan projects "notably".
Games are designed for multiple platforms: from consoles to smartwatches. The types of games are increasingly diverse and cater to all age ranges, tastes and time availability. "We can immerse ourselves in hyper-realistic virtual reality spaces, live stories, compete on PC or console, or play while commuting to work on our mobile. Market figures show that this last modality is already the one with the highest turnover for the sector and this is good news for Uruguayan producers, mostly focused on mobile development," explained Fernández Lobo.
On a technological level, developers now have tools that make their work much easier. "This is allowing creators to focus more on the design of the experience or the development of the stories. There are great works of art in small projects".
According to Fernández Lobo, video games are a global market, which means that similar products are consumed, except in the case of Asia. "Perhaps in Latin America, due to the lower purchasing power of citizens, console titles have a lower penetration than PC and mobile titles," he said.
Gamelab had a "positive influence on the sector", and now Fernández Lobo will aim to "work to scale it up and turn the 2017 edition into the event of reference for all of Latin America. We want to position Uruguay as a strategic country in the region to develop businesses and projects in the video game sector and creative industries," he said.
19% are women
Dinatel conducted several surveys of video game companies in order to obtain a diagnosis that would serve as input to support the work plan and actions to promote local companies. In the 2015 survey, more companies were found to be active than in the previous editions of 2014 and 2013. The total grew from nine to 19. The phenomenon is partly explained by the MIEM-Dinatel and Latu-Ingenio start-up incubation programme, according to MIEM reports.
The survey highlights that the enterprises are "young": the oldest started work in 2003 and most were founded after 2010. In terms of size, 58% are micro enterprises, 37% are small enterprises and 5% are medium-sized. The latter have around 20 workers and a turnover of more than USD 1 million per year, while micro enterprises have an average of five workers.
There was an increase in the number of employees directly linked to the industry, from 87 in 2013 to 159 in 2015. Thirty-one per cent are partners of the firm, 38% are dependent workers and 31% are contractors. The vast majority are young people: 90% are under 35 years of age. Moreover, 58% of the people employed are in programming and arts areas. In 2014, the gender perspective was measured and it was found that less than 8% of those employed were women. However, in 2015 the percentage increased to 19%.
In 2014, the total number of cumulative downloads of Uruguayan games climbed to 18,000,000, but most of them, around 10,000,000, took place during 2014. Just two companies accounted for 70% of these downloads.
In 2015, the companies surveyed published 157 video games, 43 are in development and 20 are unfinished. The vast majority use their own funds for their work, although there are exceptions that used other sources of funding. Seven companies accessed public funds through competitive bidding.
Companies own 43% of the intellectual property of video games. The most active marketing channel was direct sales. Free download is the most adopted sales strategy at local level. There is almost no game development for social networks.
The report also concludes that the video game industry in Uruguay is predominantly an exporter, with the majority of sales being generated in foreign markets (77%). The largest share was sold to North America (40%), followed by Latin America and the Caribbean (28%), Europe (17%) and Asia (12%).
Source: Semanario Búsqueda (Written by Laura Gandolfo)
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