Games Market in Latin America Growing But Next Couple of Years 'Crucial,' says Inca Games

Javier Entelman, CEO of Inca Games, tells us about his company's mission to act as incubator for Latin America and bring the region's games to the rest of the world.

Games are big business across the world, but the lion’s share of the revenue generated each year comes from North America, Europe and Asia. Emerging markets like Latin America (LatAm), however, are beginning to make their presence felt. According to Newzoo, LatAm is estimated to generate $5 billion in 2018, including $1.5 billion from non-Spanish speaking Brazil. While that means LatAm is only worth under 4% of the entire global games market, newly founded Inca Games believes the next couple years will be “crucial” for LatAm to reach that next level.

This week, Buenos Aires, Argentina-based Inca formally unveiled itself to the world as the "first Spanish-speaking Latin American games publisher with both a regional focus and global scale." The goal is not only to act as an incubator to help LatAm developers across the region, but also to serve as a bridge to the global market.

LatAm continues to gain momentum (Image: Newzoo)
LatAm continues to gain momentum (Image: Newzoo)

Inca CEO Javier Entelman said that he realized the region needed more help as the company’s internal studio Sixth Vowel encountered obstacles during the development of Element: Space, a tactical squad RPG, coming to PC later this year.

“Building a good game is hard, but finishing it and getting it published are colossal tasks,” said Entelman. “Latin American developers typically encounter an additional set of difficulties that block their path towards launching a game, such as access to dev kits, production and go-to-market experience, funding and more. Working on Element: Space we gained an understanding of how to overcome these challenges, and now want to share that knowledge with other indies by incubating and publishing their projects.”

$1.5 million may not be big or unusual by North American standards, but those numbers make it the biggest/most ambitious project from the region to date.

Element: Space has been billed as “the biggest game solely developed in the Spanish-speaking Latin America region to date,” but what exactly does that mean?

Entelman explained to GameDaily, “Element: Space is wholly conceived, developed and will be published by a Spanish-speaking LatAM studio and publisher (Brazil is its own market). The team is approximately 50 people strong with another 10 or so on the incubator/publisher side. We are currently calling the game a ‘Triple I’ title, since Sixth Vowel is an indie studio, but the game is massive.

“It delivers around 15 hours of gameplay each playthrough, high replay-ability, and a big original IP. It took almost 1.5 years to fully develop and had a budget of around $1.5 million. That may not be big or unusual by North American standards, but those numbers make it the biggest/most ambitious project from the region to date.”

Even though Inca’s ambition is bold, the company will benefit from the combined expertise of Sarah W. Stocker, who led studios and production teams at Glu Mobile, Stormfront Studios and PlayStation, as well as Mark Danks, who served as technical director at Electronic Arts, Stormfront Studios and PlayStation. Stocker and Danks are both serving as Directors of Incubation, working with Inca’s in-house and independent LatAm teams on best practices of game development. Furthermore, Elizabeth Olson, a veteran of PR and marketing in games and the founding EIC of Game Informer, has joined the team as Marketing Director.

“We’ve been consulting with development teams throughout Latin America for the last 10 years and are always looking for ways to both share best practices for success and shine a spotlight on the talent in the region,” said Stocker. “LatAm developers possess huge creativity but often have difficulty overcoming the production challenges faced when finishing a commercial product. Help from Inca Games and its industry veterans provide the best opportunity for these teams to achieve their goals and bring their unique and exciting games to market.”

As a region, LatAm has faced numerous challenges over the years, both from the development perspective and in how consumers can support the creatives making games.

We are already talking and working with the governments of our neighboring countries to [figure] out similar opportunities and possibilities for games developed there.

“From the perspective of development, the biggest issues have been a lack of experience, expertise, formal games education programs, and access to global game industry resources,” Entelman remarked. “Developers have always faced challenges in finding proper financing and publishing help. There are many talented developers who come up with innovative game ideas, but few of those games ever make it to market due to lack of resources, guidance and production/go-to-market experience.

“To address these issues, we are working with the Argentinian government to secure funds to help with development; working with the Ministry of Education to ensure that games and supporting fields education better align with global standards and the needs of the industry; and then we offer development guidance and production/go-to-market services to the titles and studios we curate and incubate.”

Inca will be using 1-to-1 matching dollars from the Argentinian government to begin with. The company has also opened up a Series A funding round to help accelerate the incubation program. The government funding, as you might expect, is starting only with Argentinian game developers, but Inca’s vision still goes beyond that.

“We are curating from the entire region, [but] we are working towards making that funding regional in the near future. We are already talking and working with the governments of our neighboring countries to [figure] out similar opportunities and possibilities for games developed there,” Entelman stated. “It’s important to note the funds are for the incubator/publishing arm, which is an Buenos Aires-based company working to grow the industry ecosystem of the region. We try to work with vendors from the region whenever possible, as well as help nurture the educational communities.”

Helping developers is great, but consumers in LatAm don’t have the same buying power as the rest of the world. Inca is looking at options to help out gamers across the region as well.

“From the consumer/gamer’s perspective, the complications are finding the proper channels for buying products, getting information and with the huge gap of difference between the payment methods here in LatAm to those in the rest of the world – with the biggest hurdle being the cost and access to games in terms of payments,” Entelman said.

“Given the region’s economy versus that of North America or EMEA, games can be quite expensive. Add to that the issue that only recently have credit cards become a bit more common. There is an estimated 30-35% of potential gamers shut out because they do not have a means of paying for digital transactions. We are working on a portal that would enable more flexible payment options, such as installments and bank direct, to better reach this underserved market.”

He continued, “Inca Games aims to tackle both problems at the same time: financing and incubating projects we feel have potential with our top-of-the-line incubator team, including any consultation from our American partners for every stage of production from vertical slice to launch. We will also publish those games and help create connections with co-publishers all over the world to increase the success rate of our projects.

“Additionally, we will work to create an ample ecosystem of both gamers and communicators, helping them reach their desired products with easier steps and, at the same time, start including varied methods of payment which appeal more to the typical LatAm consumer. This way, we can essentially become the go-to publisher and incubator for both developers and consumers in our market, while at the same time, remain competitive for publishers abroad and give them an effective channel to bring their games into the LatAm market.”

Beyond Element: Space, Inca will be helping to incubate and publish both Team Guazu’s Shadow Brawlers and Gaulicho Studio’s Tango: The Adventure Game. Entelman said that Inca is looking to leverage titles with broad appeal but also is happy to highlight titles that shine a spotlight on LatAm culture.

“We want to be open about the fact that we know that many LatAm games work only for a specific LatAm crowd, so we want to be nurturing that cultural groove,” he commented. “We also see a lot more globally-aimed games and we love working with those too. Our main focus is that the developer is from LatAm, their games can be targeted at whatever market they want, although we do encourage slight ‘nods’ to their culture in almost every case. We like to say we publish games for and from Latin America – games with a regional focus and global reach.

“Basically, that means we certainly look for games that can appeal well beyond the region, so we can highlight the area’s talent worldwide, but we also strive to include a more regional game that showcases the LatAM culture in each year’s portfolio. Currently, the title in this year’s offerings that does that best is Tango: The Adventure Game from Gaulicho Games, slated for release later this year. It tells the history of the Tango and its most famous musician against a backdrop of a 1930s Buenos Aires, beautiful music and clever dialog.”

While you might think that mobile games development would be the obvious fit in an emerging market like LatAm, Inca is actually putting more of its resources into the PC and console side of the business. Entelman noted that mobile already accounts for about 40% of the games market in LatAm but it’s “too volatile.”

“We are currently focusing on the other 60-ish percent, which is PC and console games. We were happily surprised when we scouted the studios in our territory and a much bigger number of studios start out as PC and console developers than mobile, and many switch between the platforms,” he explained. “We want to go for what we consider the more secure and easier to grasp market before we venture into mobile itself. In terms of installed base, PC/Steam is the biggest platform in the market, followed by Sony PlayStation, then Nintendo/Switch and Xbox. VR really hasn’t taken off yet in the region due to the prohibitive cost of the extra hardware.”

There is such potential for growth and the development costs are significantly less than in more established markets. You can see the traction with the recent increase in LatAM titles included in this year’s Indie Prize at Casual Connect, in the number of LatAM developers at GDC this year, and in acquisitions such Jam City’s purchase of the Columbia-based studio Brainz.

Entelman recognizes that Inca and the LatAm region as a whole have a big hill to climb. Getting more global recognition is not going to be easy, but he does feel that a lot of major hurdles have already been overcome.

“We feel that recent changes, both economical and political, are turning LatAm into the truly emerging market it has become,” he said. “The quick death of piracy, the rise of digital platforms for media and games, the increased ease of use of digital payment methods and the tendency towards a globalized economy all work towards all the different countries to start getting into this industry. Our work is aimed towards penetrating those countries, finding those teams with the best potential to represent the industry while at the same time starting to work straight up with the communities of players and press to create the ecosystem. It will be one country at a time, but it will happen all over the next decade

“We believe that, with some guidance, improved/better focused education/HR programs, and a better industry ecosystem in the region, LatAm developers certainly can be competitive on a global market. There are currently 320 development studios in Argentina alone (the entire region has approximately 3,000). There is such potential for growth and the development costs are significantly less than in more established markets. You can see the traction with the recent increase in LatAM titles included in this year’s Indie Prize at Casual Connect, in the number of LatAM developers at GDC this year, and in acquisitions such Jam City’s purchase of the Columbia-based studio Brainz.”

Entelman stressed that the big publishers and first-party platform holders like Sony have already recognized the vast potential of LatAm, but it’s up to companies like Inca to capitalize on this growing interest from the rest of the world.

“We want to make sure we can leverage [that interest] and don’t lose that momentum,” he said. “Our work must be focused on our advantages: already knowing the market, its challenges, working with the government and education system, and being ‘in the neighborhood’. I think it will take some investment and specific focus from some of the big players in the industry (first-party, hardware, middleware), as well as improvement/growth in the educational and HR programs to better support the region’s game industry. Finally, I think wider regional acceptance of games as a major source of entertainment, and greater awareness of the region’s games and talent, as well as the viability and cost efficiency of the region for development outsourcing will be important in getting to the next level. Hopefully, we will be a big part of making helping that along.”

There’s a Spanish proverb, “A la ocasión la pintan calva,” which means “opportunity is painted bald.” It stems from Greek mythology in which Kairos, the spirit of opportunity, is represented bald because it’s so hard to grasp. The challenge for Inca and LatAm is now to grasp the opportunity.

“We are already working to address some of the biggest roadblocks. LatAm is ready, both for consuming games and for creating them,” Entelman said.

Editor-in-Chief

James has been covering the games industry since the early 2000s and was most recently the editor of GamesIndustry.biz. He loves Zelda, Metroidvania-style games, action adventure and single-player narratives. He's also the proud father of twin boys and is obsessed with good coffee and Yankees baseball. You can reach him @bright_pixels on Twitter or you can email him at james.brightman@gamedaily.biz.