The gaming market in Brazil is expanding, standing out not only regionally but also globally. With a constantly growing player base, Brazil has established itself as one of the electronic-games industry's leading emerging markets. According to Newzoo, the country accounts for 3% of global players, placing it among the world's ten largest gaming markets alongside powers such as the United States and China. The sector's annual revenue in Brazil reached an impressive US$2.6 billion, around R$12.66 billion, a direct reflection of increased access to the internet and technological devices.
In addition to being Latin America's largest gaming market by a wide margin, projections indicate that Brazilian consumer spending on games should reach US$3.5 billion by 2025, maintaining an average annual growth rate of 10% since 2020. This growth is driven not only by the rising number of players but also by advances in infrastructure and the quality of game-development studios in the country.
What Can Brazilian Studios Expect from the 'Games Legal Framework'?
The recent enactment of Bill No. 2,796/2021, known as the “Games Legal Framework,” marks a new chapter for the electronic-games industry in Brazil. This legal framework officially recognizes game development as a cultural activity, opening new opportunities for national studios. With this change, companies in the sector will be able to access new financial resources through cultural-incentive laws, driving the production and co-production of independent electronic games.
The law also establishes a new set of rules for the production, import, sale, and creation of electronic games in Brazil, which may bring greater stability and predictability to national studios. Another significant advance is the creation of a specific code in the National Classification of Economic Activities (CNAE) for activities related to games, allowing these companies to be officially recognized and receive tax benefits and differentiated treatment under the Inova Simples program.
For professionals in the sector, the legal framework also brings formal recognition to various occupations, such as visual artists, programmers, and game producers, strengthening these professionals' position in the market.
In theory, it will now be possible to formally hire people in several game-related occupations, whether as independent contractors or under the CLT employment system, with fewer complications and potential access to more favorable tax regimes. Although this change may seem small, any support is significant for a sector that had previously been “almost” forgotten by the government.
As expected, however, some points were left aside. The Federal Government vetoed the proposal for a 70% income-tax discount on remittances abroad involving earnings from Brazil's electronic-games industry.
They Can No Longer Be Considered Games of Chance
Another important point regarding this change under Brazil's Games Legal Framework is that these electronic games are no longer categorized as “games of chance.” Before the new legislation, there was a possibility that electronic games would be taxed in the same way as games of chance, such as roulette and others. The Games Legal Framework, however, made a clear distinction between electronic games and games of chance, establishing that electronic games, including traditional video games, should not be treated as betting games.
Prospects for the Future of Games and eSports in Brazil
With the rise of the gaming market, Brazil is also becoming an important hub for electronic sports, or eSports. According to the Pesquisa Game Brasil (PGB), 82.9% of Brazilian gamers are familiar with eSports, and 63.8% regularly follow competitions. This growing popularity is supported by leagues such as CBLOL and ESL, which offer high-quality live broadcasts and prominent in-person competitions.
The most popular game among Brazilians, CS, was recently succeeded by Counter-Strike 2 (CS2), which is already replacing the previous title in official competitions. With continued development, Brazil's eSports scene continues to create new opportunities for players and developers.
