Often the reason that happens is because a good percentage of foreign news is about developers, publishers, and industry events like Tokyo Game Show and Gamescon. Sadly, if the news doesn’t have some sort of direct effect on the American game market, the news simply isn’t of interest to the more casual readers. I can say that from first hand experience since I concentrate on writing about global news, and the reader numbers are negligible compared to doing a Top 5 article or a game review. But foreign markets are becoming more and more prevalent, and for developers and publishers whose bottom line is the net profit, as revenues rise in those countries, so will the prioritization of appealing to those markets.
Look at the history of games so far. Up until the early 2000s, Japan was, by far, the more relevant market in terms of audience and innovations in game design. Most larger scale games like Metal Gear Solid, Final Fantasy, Mario, and Zelda, all came from the Japan and had profound impact on the way that the US develops games today. Now that the U.S. has become the more influential market, we have developed game design in a way that appeals to our own cultural preferences. Open-worlds, branching stories, first person shooters – these are gaming touchstones associated with American game design.
China
Just this week I reported that China has passed the United State as the country that produces the most revenue from games. Of course, they have an adverting due their population size. Looking at the amount of money they spend per-capita, their population doesn’t even produce even half that of the United States’. They are still a developing country and more and more of their population is moving out of rural areas and moving into urban cities, and with that comes more access to technology. China’s annual game revenue will continue to increase, probably not much per-capta, but rather because their growing “internet population”.
The Chinese game market preference and taste in games and platforms are very different. Up until recently, consoles have been banned in China, and after being unbanned, the sales can only be described as disappointing. Current estimates show that by the end of the year, both the Xbox One and PS4 will only sell a combined 550,000 consoles. A recent report showed that there are over 366 million mobile gamers in China and even though the growth rate has slowed down to a 12% quarterly growth, it is still much higher than most other markets. PC gaming is also booming, not just in sales but but also in the popularity of the e-sports. Games like League of Legends and Hearthstone, are not only played by millions, but popular streamers and tournaments also get millions of viewers. Unlike American streamers, whose primary form of making money is through donations or advertising revenue, Chinese gamers have firmly taken advantage of E-commerce. By opening their own shops on E-commerce websites, they are able to sponsor certain products, some of them having nothing to do with technology, like cookies. Through this they are able to make a substantial profit, albeit, only if they are popular enough.
Brazil
In Brazil, and much of Latin America, there has always been a very heavy tax on imported goods. Because of this tax, the prices for video games and consoles in Brazil has always been much higher than that of America, with software frequently costing 50% more than they would cost in America. Even worse, when the PS4 first released in Brazil, the asking price was $1,800 dollars. The vast majority of the public either is unwilling to pay such steep prices or cannot afford it. That is why the market for older consoles is very much alive and well in Brazil. Consoles as old as the Master System are still continuing to be sold, and the PlayStation 2 is still one of the more popular consoles in the country. Both Microsoft and Sony have recognized that affordability is a big issue in the Latin America, and have started to manufacture hardware in Brazil in order to minimize the cost of importing and tax. Microsoft has already started manufacturing both Xbox 360 and Xbox One, and Sony has been manufacturing the PS2 and PS3 for a few years now with the PS4 being forthcoming.
In the long run, the efforts that both Microsoft and Sony have made to drive the prices down will likely pay many dividends. A recent report by the NPD Group states:
Russia
Unlike most of the other countries on this list, Russia has had a long history with video games, which goes back all the way to developing the best selling game of all time, Tetris. Back in the 70s and 80s, arcade gaming was huge in Russia, and because of that popularity, quite few developers began to make their own arcade games. Of course with Russian patriotism rampant at the time, many of the arcade games tried to appeal to that side players. The Soviet Arcade Game Museum has collected some of the arcade machines that have maintained them over the years. Games that allow you to play as cosmonauts or military, allowing players to shoot torpedoes at enemies or be a sniper. That sentiment still remains in Russia as the government has considered banning any game that depicts what they deem false history. In a 2013 interview with Russian officials, they stated that “ A video game has to have not only an entertainment value, but it also has to teach and be conducive to patriotic education.” The do not want a “negative image of the Russian warrior” being depicted in any games, and are beginning to develop their very own patriotic games which take place during pivotal moments in their country’s history.
Regardless of any of their importation policies, Russia still generates 1.26 billion USD in gaming revenue and is ranked number 12 among all the countries in the world. Their e-sports industry is booming, and recently their one of the larger e-sport sites in the country landed a 100 million dollar investment from UMS Holdings. The site has about 7.6 million subscribers and in 2014 they generated over a billion views. As of 2013, Russia is also considered #1 in the world when it comes to the percentage of gamers who play on PC, at 98%. There are are over 46 million gamers in Russia, and 56% of them spend money on in game purchases. These numbers are a bit dated, so they may have increased significantly since then.
India
India is the smallest market by far out of all the countries mentioned on this list. They are ranked 18th in games revenue and are making less than half the revenue of Russia - only 428 million USD a year. For a country that has close 1.3 billion citizens, this number can only be considered meager. Even though the population of India is migrating into urban cities similar to China, most of their population still live in rural areas where there is very little access to consumer electronics like game consoles or computers. And even if the technology was readily available to the majority of people in the country, the average annual income is only $616 dollars. It would be almost a whole year’s salary to a buy a new console and a couple of games.
China was heavily influenced by the gaming culture of Japan, and Japanese games resonated with Chinese audiences. The character designs, the story, the game mechanics - the Chinese easily embraced all of these aspects into their culture. As India is still considered a somewhat conservative nation, it is easy to understand why it has been harder for video games to gain the same amount of traction as they have in China. But with a growing younger generation of consumers with more disposable income, the growth in India these past few years have been very high.
Rajesh Rao is the CEO Dhruva Interactive, the first ever video game studio in India, chronicled his struggles with the Indian market in a recent interview. “There’s just no other explanation for starting a games company in India back in 1997. There was no market. There was no ecosystem. There was no consumer.” He goes on to talk about the potential that mobile and social gaming has in India, as India is the fastest growing smartphone market in the world.
