Written by: 4ever
Translated by: Bosen, Keira
01
Preface
The rapid development of crypto and game ecology is ongoing in Latin America.
Devcon 2022 hosted in Bogota Colombia drew a lot of attention this year. This was the first time Devcon was brought to South America. Ethereum’s founder was present at the venue and this grand event attracted many Latino developers to participate.
Chess, the founder of Quest3 indicated “ Everyone who attended Devcon 2022 would have a feeling of wanting to be fully engaged in Latin America. The development of the Crypto and Web3 industry is beneficial by the encouraging atmosphere in Latin America. However, most of the developers are focusing on the backend development, while people are expecting specific products.
Chess also pointed out that the key to development in Latin America is the localization of the applications and reducing the transaction fee.
As an emerging market, Latin America has a demographic dividend and a younger demographic structure similar to Africa; it also has certain similarities with the Southeast Asian market. The player base and market size have begun to grow rapidly in recent years, and the Latin American market has greater potential.
This article sorts out the crypto ecology and game ecology in Latin America from relevant data and basic facts, so as to understand its development status, future trends and opportunities.
02
Latin American Market Overview
Crypto Ecology
According to the latest trading data statistics, between July 2021 and June 2022, Latin America recorded a 40% growth rate of $562 billion in cryptocurrency transactions, accounting for 9.3% of global transactions.
Data source: Chainalysis 2022 Cryptocurrency Geography Report
Among the top 30 countries by global market size, Latin America accounts for 5 seats, namely Brazil (7), Argentina (13), Colombia (15), Ecuador (18), and Mexico (28).
Latin America crypto Market Capitalization ranking over the past year
Gaming Ecology
Latin America is developing rapidly in this emerging market. Ranking second in the world, with the US$8.7 billion gaming market growing at an annual rate of 6.9%.
Data source: Newzoo2022 Global Gaming Report
The number of gamers in Latin America is 315 million, with an annual growth rate of 4.8%, it has the second fastest growth rate in the world.
Data source: Newzoo2022 Global Gaming Report
03
Characteristics of the Latin America Market
Preference for USD, Gold, and Stable Coin
Most Latin American countries face persistent inflation and currency devaluation due to factors such as the debt crisis. Among them, Venezuela and Argentina have the most serious inflation problems, and their local currencies have lost more than half of their value in the past year.
Venezuela has lost more than 100,000% of its value in the past eight years, and Argentina has suffered from severe inflation for most of the last century.
According to the latest data from the International Monetary Fund, inflation has accelerated in Brazil, Chile, Colombia, Mexico, and Peru. The combined inflation rate has exceeded 8% and is expected to exceed 12% within six months, a 25-year high.
Locally, Latin American people are more willing to use the black market to convert the US dollar into their national currency, because the black market can exchange more.
In Argentina, you can get 270 pesos for 1US dollar in the black market, and only 140 pesos in the bank. All this has led Latin American people to prefer to use US dollars instead of local currencies, and the use of encrypted stablecoins is also increasing year by year. More than 1/3 of Latin American people have used cryptocurrencies for consumption and savings.
34% of Venezuela's cryptocurrency market size comes from small retail transactions
Traditional financial services fail to satisfy Latin American people
The Latin American remittance market has a size of 150 billion US dollars, and the use of traditional banks for international transfers has high handling fees and takes a longer time, which has pushed Latin American people to cryptocurrencies.
The US-Mexico border has one of the highest rates of cryptocurrency remittance use.
Felipe Vallejo, the chief regulatory officer at Bitso, Mexico's largest cryptocurrency exchange, noted that a large portion of household income in the lowest socioeconomic strata of Mexico comes from remittances from relatives. As of June 2022, Bitso has processed more than $1 billion in U.S.-to-Mexico remittances, a 400% year-over-year growth rate.
Also, similar to Africa, banking services are not widely available in parts of Latin America.
In El Salvador, for example, about 70 percent of the population does not have bank accounts or credit cards, and the economy relies heavily on migrant remittances, which account for more than 20% of El Salvador’s GDP.
Earn through Defi and Play-to-Earn games
Latin American people are always actively looking for ways to increase their income, whether local high-net-worth individuals or the average person.
Nubank is a Brazil-based digital bank and one of the world's largest private fintech companies, with operations spanning traditional finance and crypto.
Nubank’s crypto platform, which has reached 1 million users in just one month, claims that the adoption rate of cryptocurrencies among Latin American people is growing strongly, and the rate of growth far exceeds that of the stock market.
A person in charge also said: "Our users like to earn income through trading and Defi business, not just saving."
Nubank also plans to launch the token Nucoin in the first quarter of 2023 to incentivize its users to use its crypto products and services more frequently by offering discounts and incentives.
From the chart below, we can see that Defi dominates the entire Latin American crypto market, with nearly 50% of Chile’s trading share coming from Defi.
Statistics of Defi transaction share in Latin American countries in the past year
Due to the low-income level of the local average person, young people in Latin America have been making money in traditional games long before the rise of P2E games.
Due to the economic crisis and currency devaluation in Venezuela, it is difficult for the average person to obtain basic living materials. Tens of thousands of Venezuelans play gold in games such as World of Warcraft and Runescape and then exchange them for basic living materials through US dollars or cryptocurrency transactions.
After the rise of P2E, it began to attract Latin American players with its high revenue.
League Of Kingdoms and Axie are strategy-based chain games with strong competitiveness that were released at the same time. Players join guilds to compete and obtain rewards. The winner of LOK's earliest guild battles came from the Brazilian Players League.
Coy.GG is a large gold mining guild in Latin America. It has more than 400 accounts in Axie Infinity and more than 1,500 gold mining scholars. They vigorously promote blockchain games in Latin America by providing tutorials, admission NFTs and scholarships.
Therefore, in the field of blockchain games, Latin America is similar to Southeast Asia: low wages, a large base of game players, and crypto users. This also lays the foundation for promoting and the development of blockchain games in the region.
Policy changes have led to the widespread use of basic equipment
High import taxes and fees in the past have hindered the spread of computers, game consoles and smartphones in Latin America.
But in recent years, many Latin American countries have lowered such import tariff policies. In late 2020, the Brazilian government announced a reduction in taxes on industrial products for video game consoles, accessories, and games, which improved the situation.
In the list of global smartphone users, Brazil and Mexico have entered the top 10 in the world. However, in terms of market revenue, Latin American countries have not been able to enter the global forefront.
Data source: Newzoo 2021 Mobile Gaming Report
The Internet penetration rate of Brazil, Mexico, Colombia, and Argentina is close to or exceeds 80%
The population characteristics
Latin America has a population of nearly 660 million and 315 million of them are gamers. Mobile gamers account for more than 85% of game players, which is close to 280 million people.
Brazil ranks fifth in the world for crypto users, with more than 10 million crypto users, surpassing Vietnam and the Philippines.
Statistical ranking of global crypto users
Game Preference
Latin American people are crazy about competitions and love competing with each other, which provides a good foundation for the development of games and eSports in Latin America.
Unlike European and American players who prefer casual games, Latin American players prefer competitive and moderate to hardcore games.
Comparison of game type preferences between players in Brazil and the UK
At the same time, we have observed that MOBA and FPS, two of the most popular esports categories in the world, are being sought after by Latin American players. More and more Latin American players are beginning to enter the esports arena.
Esports teams from China, South Korea, Europe, and North America have been popular choices for winning championships in the past, and the number and performance of Latin American teams have begun to increase in the past two years, which also reflects the gradual construction of the game ecosystem in Latin America.
Payment
Latin American gamers prefer to use prepaid cards for payment. Prepaid cards are becoming more popular in Japan, mainly in the form of debit cards and shopping vouchers.
Previously, Mastercard announced that it will be partnering with Binance to launch a prepaid card in Argentina that allows local Binance users to make purchases and pay bills with cryptocurrencies.
Latin American crypto company Ripio has started rolling out a prepaid debit card in Brazil that allows paying with cryptocurrencies and earning bitcoin rebates.
Ripio said the company hopes to release 250,000 cards developed in partnership with Visa by the end of this year, offering the product to its 1 million users in Latin America, which will allow access to the Brazilian real and Ripio's 28 cards on its platform. cryptocurrency for payment. Serrano said Ripio is considering adding rebates to cryptocurrencies other than bitcoin.
Localization
Due to geographical and political factors, countries in Latin America have great differences in culture, language, habits, and preferences, which brings challenges to product localization.
Brazil is a relatively unified region, and its language is mainly Portuguese. Players mostly share consistent habits and preferences. Most of them like to watch live game content through NimoTV and Booyah.
Mexico, Argentina, and Colombia are Spanish-speaking countries, which differ greatly in language and preferences and are complex. Gamers generally like to watch live streaming of games through YouTube and Twitch.
As mentioned above, Latin American people like sports, so products with strong esports attributes are more likely to be favored by local users.
Organizing online and offline game events can make games spread in Latin America quickly.
Considering the economic background, the most common devices adopted by Latin American gamers are basic Android phones while Apple and PC or game consoles are seldom used by Latin American users.
"Free Fire", the FPS shooting game, stands out among many star FPS shooting products by virtue of the operation strategy of focusing on elementary configuration routes and holding a large number of offline e-sports events in the local area and gaining a huge market share in Latin America.
04
Conclusion
At present, it seems that the crypto ecology and game ecology in Latin America have a good foundation for development and great market potential.
As an emerging market, the increasing popularizing rate of mobile phones and the internet has brought a lot of opportunities, but how to localize is a difficult problem that everyone must overcome. Whether making products that meet the needs of the local market and conform to the habits of Latin American people will be the key to success.
As Chess said, Latin American people are waiting for more products.
Considerable profits or hyper-competitive Game-Fi projects may be hard to resist for Latin American players.
Link to the original article can be found here, https://degame.com/en/feed/explore?id=13103&type=share
