Gaming Consoles In Emerging Markets

One of the biggest advantages of emerging markets is the huge potential economic windfall that results from bringing goods and services to a new audience. On the other hand, one of the biggest downsides of emerging markets is the uncertainty that accompanies any foray into a new, unfamiliar situation, where the usual proven time-tested strategies and procedures may not have the same impact.

Gaming console manufacturers face that very situation today, as they attempt to make in-roads into new territory. Let’s explore the issues that game console manufacturers face in dealing with emerging markets.

gaming console on mobile devices
Game console manufacturers may have a challenge in fostering enthusiasm in emerging markets where mobile devices already have a foothold.

What’s An Emerging Market, Anyway?

Although there are several ways of defining the term, the one that best suits our purposes is this: an emerging market is a nation (or wider geographical area) where previously restrictive trade and other economic barriers and restrictions have been lifted, or where the economy has developed to the point where it matches those of more developed countries. Sometimes, it’s a case of both!

When you say “emerging market”, the nations which usually spring to mind are Russia, India, Brazil, and China. In the context of the gaming industry, an emerging market means an economy where the average person has enough income that they can afford to spend some money on a non-essential thing like gaming, a point made in the article “Cheap Gaming Consoles for Emerging Markets”.

So, what are the issues and challenges of bringing gaming consoles to these emerging markets? Here are three of the biggies.

Many Consumers Are Already Using An Alternate Gaming Platform

The gaming consoles in question would be on the more economical side of things, with a simple controller, hardware with lower specifications, and games that aren’t rendered in high-def graphics. It may be seen as a low-risk means to get a foot in the door, exposing audiences in these new markets to the basic platform before ideally ramping things up if the roll-out is successful.

The problem is, many in these target markets are already playing games on mobile devices or personal computers. Some may see purchasing a dedicated gaming console as a step backward. If the introductory consoles are low-end units lacking greater processing power or bells and whistles, it seems risky to have people turn away from their versatile, complex devices in order to get something that can be “only” used for games. Perhaps consumers need to be made aware of the therapeutic effect of game playing, as pointed out in the article “Game Play As Medicine”.

Piracy

China and Russia are notorious for incidents of piracy, which not only results in copyright theft, but also provides gamers in those countries with knock-offs of the original product at a lesser price, cutting into the profits. This represents another risk for the legit gaming companies, and brings into question the viability of the whole idea in the first place.

Government Interference

Whether it’s in the form of crushing taxes, censorship, or over-regulation, governments in emerging markets represent another formidable obstacle for gaming companies to overcome. It can be tough enough to break into a new market without the powers that be interfering with your efforts. For instance, China is very sensitive to gaming content and its subsequent influence on its people, while Brazil’s tax laws expose the console gaming industry to a greater than normal tax burden.

So, What Now?

What it all comes down to is one question: can gaming companies provide a console that’s good enough to lure people away from their established gaming habits, while navigating past governments and pirates, all the while keeping the whole undertaking on a reasonable budget? That sounds like the makings of a good game in and of itself!

Gaming consoles may have to give emerging market audiences more versatility, and not just having people settle for something that simply runs a game. While there is certainly enthusiasm for games and consoles, this whole matter is a calculated risk. It will be interesting to see how it unfolds in the coming months.

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Born and raised in the Boston area, I was rocketed to New Hampshire, where under the Granite State's yellow sun and lack of income tax, I have gained the powers of super-sarcasm, brilliant creativity, and slightly disturbing sense of humor.

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