Chile
Feature

Chile’s gaming developer industry prepares for battle

Bnamericas Published: Tuesday, May 21, 2019

Chile is not the first country that comes to mind when you think of the multi-billion dollar gaming developer industry. But with a small pool of developer talent, an emerging startup scene and a helpful pro-export minded government, a number of local companies are starting to punch above their weight on the international stage.

Chile's gaming developer market grew consistently until 2015-2016, when it took a hit with the exit of two large foreign companies: DeNA and Behaviour. However, the talent cultivated by those companies was soon absorbed by local companies.

The sector started to take off when state export promotion agency ProChile began supporting local developers in attending international events such as GDC and Game Connection in the US and the Tokyo Games Show, which enabled local companies to get exposure in markets like the US, Japan, Germany, Holland, the UK and Canada.

More recently Poland has become a new focus for Chilean game developers given the recent development and opportunities that country is seeing.

Since 2016, Chile has hosted the local event gaming fair BizCon and also hosts the international Festigame.

The industry started growing significantly in 2011 when local video games association VG Chile (which accounts for 85% of Chilean gaming companies) joined forces with ProChile.

The industry grew from 14 companies in 2011 to over 60 in 2017. More than 70% of those are located in the Metropolitan Region and 20 export internationally. Some 154 video gaming projects were embarked upon in 2017 with 10.6 projects per company.

Since 2014 ProChile has provided some US$843,000 in funding to promote the video games industry overseas, and since 2018 the agency has had a department dedicated to the sector.

THE MAIN PLAYERS

The sector generated some US$8mn in 2017 as 95% of the companies are very small and only a handful generate close to US$1mn in revenue. The industry is still mainly male dominated with only 16.1% women in 2017.

Chile’s main game developers are almost 100% export oriented, with nearly all sales taking place outside Latin America. The companies ally with large publishing firms to sell abroad.

Among the main players in the country are Ace Team, Aone Games, Tiny Bytes, Gamaga, Cangrejo e Ideas and Niebla Games.
Some of the companies develop games for consoles, like Ace Team, while others develop for mobile and PC and use a freemium model.

Ace Team

Ace Team, which was founded in 1997, is one of Chile’s oldest games companies, developing concepts for different genres ranging from action to historical and comical.

The company’s most successful game to date is the Rock of Ages series, which has won awards or been finalists in Spain, Switzerland and Sweden. The game, designed for Xbox One, Steam and PS4 has 100,000s buyers and millions of followers on YouTube, according to ProChile.

The company’s Zeno Clash fighting game has been voted by PC Gamer magazine as one of its top 100 games, says co-founder Andrés Bordeu.

English is the main language of all Chilean games though they are localized with voice-overs or subtitles in different languages

The company has won some state funding but has been mainly been self-financed.

Tiny Bytes

Tiny Bytes is an Argentine-Chilean social gaming company, which allows social interaction on mobile devices. The biggest selling game is Massive Warfare tank game, where the business model is freemium with the option of upgrading through the purchase of cryptocurrencies or characters.

"Our main focus is the masculine profile interested in combat and war action games," the company says.

Tiny Bytes was incubated by Start-Up Chile early stage development program of state development organization Corfo, which provides up to US$80,000 in seed funding.

The company was nominated for the Indie Prize at Casual Connect 2018 and has raised US$1.4mn funding from Initial Capital and London Venture Partners, one the first international investments in a Latin American video game developer. Other investors include local Argentine investment fund NXP Labs.

AOne

AOne was the only Chilean company invited by Sony to participate in the Playstation Experience 2017. The video of its best known game “Omen of Sorrow” received 70,000 views on Playstation’s YouTube channel.

Gamaga

Gamaga is Chile's largest independent video games company with over US$1mn in revenues and games with track records of hundreds of millions of downloads including Banana Kong.

In January, 2018, Gamaga announced a partnership with US retail, online, and mobile games publisher iEntertainment Network, to produce new original games for a major TV network.

The first game published was Red Crimes: Hidden Murders with subsequent seasons and more games due to be published in 2019 with advertising and social media from the TV Network.

CHILE AS A PLATFORM

Ace Team co-founder Bordeu says being located far away from other major game development hubs and industry conferences is a slight disadvantage that is offset by the lower costs of development.

Size is not important, says Bordeu, pointing out that even some of the largest companies in the business have gone out of business.

According to Andrés Constantinidis of Tiny Bytes, the Start-Up Chile funding and support from ProChile has been important for the company’s development.

"Chile is a good platform for development. Costs are relatively low with a good level of talent. The market is still at the initial stages compared to developed countries like the US, Canada and UK," Constantinidis said.

"In Latin America, Brazil and Argentina have more companies due to the market size but I think Chile is among the top markets for developers in the region," he added.

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