Brazil's New Gaming Legislation: A Game-Changer for the Industry

The Brazilian gaming industry is on the cusp of a significant transformation, thanks to the introduction of a new legal framework. This legislation, passed in May, redefines the gaming industry and provides new incentives for gaming companies, creating fresh opportunities for investment and growth. According to Carolina Caravana, vice president of the Brazilian games trade body Abragrames, this marks a new era for the industry, which will now be split into two distinct periods: before and after 2024. The framework allows companies to be recognized as video game businesses, rather than just software companies, and provides them with their own code number within the National Classification of Economic Activities. This change will enable Brazilian states to view the gaming industry from an economic perspective, much like other countries such as the UK, France, and the US. The legislation also classifies games under the category of culture, opening up new avenues for grants and funding. Furthermore, it draws a clear distinction between video games and gambling or sports betting titles, allowing the industry to differentiate itself from these sectors. This new framework is the result of a long-fought campaign by trade bodies and developers, who are now optimistic about the future of the Brazilian gaming industry. Thiago de Freitas, CEO and founder of Kokku, one of Brazil's largest studios, believes that this legislation will help to create a healthier environment for developers, addressing the disparity in the market's performance and providing access to equipment such as dev kits and test kits. The introduction of tax incentives is also expected to have a significant impact, helping to fund studios and projects that might otherwise have struggled. However, Abragames' president Rodrigo Terra warns that introducing tax incentives will not be an easy task, given Brazil's complex tax structure. Nevertheless, the industry is keen to explore other ways to access funding and investment, with many developers hoping that the government will provide support for the growth of the industry. As Julianna Brito, founder of Indie Hero, notes, the ability to register gaming companies will make them more visible to foreign investors, providing a sense of security and encouraging private investment. While the full impact of the framework will take years to be understood, Brazilian developers are confident that it will give them a competitive edge on the global stage. Terra even describes it as the "most contemporary and modern gaming legislation in the world." The implementation of the framework has already begun, with interministerial work groups being organized to tackle the task. Looking ahead, the industry is expected to diversify, with traditional game developers, advertising game studios, and work-for-hire services companies all contributing to the growth of the sector. As Apex Brasil's Eros Silva notes, the next five years will be crucial for the Brazilian gaming industry, with small companies being invested in, creating more jobs, and contributing to the economy.