The country participates in less than 1% of the $ 6,000 million that move video games in Latin America.
The pandemic boosted the innovation and development of the food industry video game. On a global scale, that industry moves more than $ 159,000 million a year. Of that total, around $ 6 billion was generated in Latin America, with a growth of more than 20%.
Nevertheless, Ecuador it is not part of that boom. The import figures for games and consoles do not exceed $ 1.2 million.
Currently, four companies are operating in the sector, but marketing and activities related to national production do not even reach $ 1 million.
In the region, the list of countries with the greatest development is led by Mexico, with a movement of $ 1,901 million; Brazil, with $ 1,754 million; Argentina, with $ 507 million; Colombia, with $ 417 million; and Chile, with $ 308 million. Those figures include not only sales, but also the development of video game.
This industry, which is part of the call orange economy, brings together more than 2.300 million players around the world. In Latin America, the market encompasses more than 230 million people.
Tax and informality
One of the main barriers is that in Ecuador exist taxes high on the products that are marketed in the sector.
So, for example, a console from video game which is in the United States at a maximum price of $ 499, in Ecuador it sells for no less than $ 1,500. This means that the products are 300% more expensive.
The Government, within its tax reform proposal, included the elimination of 35% of Taxes on Special Consumption (ICE). This change would lower the cost to $ 780, but the difference with other countries would remain significant.
Products within the category of video game currently pay more than 77% of their value only in taxes: in addition to the ICE, 15% VAT is added; contribution to the Development Fund for Children (Fodinfa) and fees, among others.
Adrián Bucheli, owner of a store specializing in video game, commented that the tax burden completely distorts the market and makes most of the business concentrate on the informal sector and the smuggling.
“There are no incentives to buy from a formal business. Customers prefer to download games illegally online or bring them directly from abroad by passing the controls. Also, local producers do not have support or public policies that support them, “he said.
No environment conducive to innovation
In August 2019, the Government Lenín Moreno presented a plan that, in theory, sought to promote the orange economy. It was ensured that, with a reduction in taxes, specialized credits, among other support, it would be achieved that the cultural industries will add up to 3% of the Gross Domestic Product (GDP) in 2021.
The plan remained more on paper than in reality and sectors such as those of the video game they suffer from the lack of real development policies. In addition, deficiencies at the educational level cause there to be a deficit of 9,000 programmers and developers each year to drive technology and innovation.
An analysis by the Inter-American Development Bank (IDB) also points to the lack of trained technicians; but it also questions the obstacles that still exist for entrepreneurship; limited access to financial capital (loans, angel investors and venture capital); the lack of integration in global value chains and, finally, the high fragmentation of the sector.
Off the radar of tech startups
Despite the fact that technology ventures have grown 150% in the last two years, within the radar of the so-called Starups (prepared by the Good Trip Hub company) no initiative related to video games is registered.
Of the 280 mapped ventures, 58% are concentrated in the financial and electronic commerce sector. In entertainment and cultural industries, there are only 7 initiatives with 29 direct jobs created.
2021 was declared by the United Nations the “International Year of the Creative Economy for Sustainable Development”; with special emphasis on the highest innovation sectors such as videogames. However, that industry is almost non-existent in Ecuador.
Less than 25% of technology ventures in Ecuador receive some type of financing or venture capital to develop.
