Although the Knowledge Economy Law offers various incentives to the sector, there is a sub-field in which Argentina has world-class talent that is fighting to survive.
This is the video game industry , one of the most affected by the stocks . Almost 90% are made up of micro and small companies that, not having the resources to overcome the crisis, must sell double or triple to maintain their operation and their place in the global market.
It is the entertainment industry with the highest turnover globally: US$160 billion annually (vs. US$19 billion for cinema). Workmotion assures that Argentina can be a key player:
It is the main country globally to hire junior talent
It is the third most important to look for senior developers
He also highlights the problem of the dollar: " Local salaries are 75% lower on average among the 25 countries with the highest GDP."
Video game industry: the present of Argentina
According to data from the Observatory of the Argentine Video Game Development Industry, in Argentina :
There are 19 million players (40% of the population)
There are 126 developer studios, which employ 1,646 professionals
43 small and 10 large games released in 2022
Sells 35% to the US and Canada, 12% to Europe, 42% to Argentina
The survey highlights that the three main obstacles that companies detect are: economic instability, difficulty with payments and collections abroad, and tax pressure.
In addition, more than half of companies say that outsourcing personnel from abroad makes it difficult to find personnel , a common problem throughout the Knowledge sector.
" The video game industry is advancing about 15% annually , but if the current restrictions did not exist, it would grow much more and be more competitive," Ezequiel Heyn, co-founder of Purple Tree and vice president of the Association of Argentine Video Game Developers, tells iProUP ( ADVA).
One of the main difficulties is generating income to recover the investment. Javier Otaegui, co-founder of Tlön Industrie, tells iProUP that " When you export or publish a video game from Argentina, what you are left with are ridiculously low amounts . This fundamentally affects new and micro-entrepreneurs."
Otaegui breaks down the discounts that apply when publishing a $10 title on Steam, a kind of Netflix of gaming :
30% Steam commission
30% as withholding due to lack of international double taxation agreement between Argentina and the US. That is, the same taxable event is taxed in two countries.
The dollars for that 40% that the studio receives are devalued by 65% due to settlement in the official dollar
According to the expert, " this means that the company receives US$1.7 for every US$10 it exports . In another country, if you invested US$100,000 you would have to sell 10,000 units for US$10 to recover your capital. But in Argentina you need sell 30,000 units to be done."
Video game industry: the crisis reached Steam
But it not only affects supply, but also demand: from theNovember 20, users who want to use Steam games must pay for them in dollars. The firm justifies that "the volatility of exchange rates in Argentina makes it difficult for developers to choose appropriate prices for their games and keep them updated."
"In addition, it is very difficult for us to keep payment methods in operation due to constant fluctuations, fees, taxes and logistical problems," he argues. In this sense, he reveals that, some time ago, Steam allowed creators who publish directly to set the price in local currency.
The platform has an algorithm that suggests a value to optimize sales , which the developer can accept or not. "The issue is that it does not update prices automatically, but rather it is the publisher's responsibility. Therefore, in high inflation countries like Argentina, it is outdated ," he says.
Furthermore, " every time the amount is changed, promotions cannot be made within the platform for 30 days . In general, they are carried out about 10 times a year, but if you updated prices and cannot promote, you lose a lot of money."
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