Due to high LTV and the easy localisation of social games in English-speaking countries such as the US, UK and Australia, most gaming companies are focused on these markets. Consequently, we are suffering an exponential growth of user acquisition costs that only the biggest publishers can afford. All other small and medium-sized developers should look for new niches, markets, games-genres or innovative game mechanics to reduce user acquisition costs and position themselves in the market in order to generate enough revenues to pay their bills.
While most social games revenue comes from the developed countries, there are still great business opportunities crossing new frontiers such as South Africa, Asia and Latam to generate new revenue streams. If you focus on localisation, companies could establish themselves as trusted brands in these markets.
Localised games relevant to the local market are more likely to attract players than European/US casino-style games. If you want to achieve a truly “local” game experience you need to start from scratch and hire local experts with the expertise and contacts to push you as a trusted brand.
Latin America situation
Furthermore, the economic situation in Latin America is recovering very well from the crash of 2008, even faster than some developed countries. We are constantly seeing news about the exponential growth of countries such as Mexico, Brazil, Chile and Colombia in combination with a technological revolution that only benefits our sector.
- Symbian devices have been completely replaced by Android and iOS devices in the last two years and most of the population is willing to switch to a smartphone in the following months. Brazilians have proven to be the most social users by completely replacing Orkut with Facebook, positioning themselves as the country with the second most Facebook users after the US.
- Moreover, the payment method barrier has already begun to break. Most families already have a credit card but prefer to use other payment methods such as “Boleto Bancario” or prepay cards due to a psychological fear, which also happened in Spain and other European countries a few years ago.
- Surprisingly, there are families who are accessing optical fiber or high-speed bandwidth for the first time.
- There is a high demand for media partnerships, white-labels and collaboration.
Perhaps the conversion rates are not as high as in the developed countries. However, we have seen similar ARPPUs in certain countries so it is not a question of no monetisation. It’s all about the cultural barrier of online payments. In fact, we have found players who had never made an online payment until they played our games.
When we speak about Latin American markets, most people think of a single market when in fact, the Latam market consists of 33 culturally different countries, and a “whole new continent” named Brazil. The Portuguese-speaking country is by far the largest gaming market in Latin America.
The Latin America opportunity is clear: an emerging market about to explode and only brands which have made enough awareness could make profit.
