Negocios / Video Games “Made in Mexico,” A Serious Bet

Video Games “Made in Mexico,” A Serious Bet

The Mexican market for video games is the largest in Latin America and the country moves forward to consolidating an industry with creations of its own. Juego de Talento (Talent Game) is an entrepreneurial venture with an innovative and propositive business model with the objective of promoting purely Mexican video game production. The challenge is to actively integrate Mexico to one of the most buoyant industries of our times, which foresees sales of 45 billion usd during the course of the next two years.

Global economic crisis? For the video game industry this concept merely represent another of its animated fictions due to the fact that the figures sound absolutely real.

According to the International Development Group (IDG), a company that identifies the fastest growing social and economic sectors, by 2011 the global video game market will reach revenues as fantastic as its creations: 45 billion usd.

Mexico’s role in this 3D story is worth millions and is significant mainly for the producers. In 2011, the video game industry in Latin America will surpass those of Canada, Italy and Australia. Mexico is the leading consumer of the region, where 50% of the video games are sold. According to an Americas News Intelligence report, Mexico has a market of 15 million players that generates annual sales of 670 million usd. The manufacturers expect an income of 1 billion usd by 2010.

We are ready to “go to the next stage of the game.” Mexico is beginning to participate in another section of the industry: the development of its own video games. The bids are high and the game is undoubtedly serious.

Turning the Game into Business
The initial development stages of the industry are precisely what Gabriel Grinberg has transformed into the strength of his business strategy. As the saying goes, a good player never loses if he knows how to recognize the signs in time.

Grinberg is the creator of Juego de Talento (Talent Game), a company which main goal is to develop the “Made in Mexico” video game industry with a relatively fast-paced growth rate.

“The fact that countries with a much smaller market have a much larger video game industry is unconceivable to me,” remarks the President of Juego de Talento.

It is a fact that the consumers of Venezuela, Central America, Chile and Colombia barely represent 5% of the total regional market; nevertheless, the video game industries of these countries are ahead in production compared to Mexico, which in realistic terms, is barely beginning to participate in one of the most promising sectors of the global economy.

In this scenario, Juego de Talento is not merely an enterprise. It is a business model conceived in 2007 by Gabriel Grinberg with a focus not only on the present but also on the short-term future.

The strategy has various stages, most of them simultaneous, to promote the Mexican video game industry: an annual contest to identify young talents, an incubator for new enterprises and the certified training of these talents in the process of creating new companies.

“The idea is to initially generate the critical mass in order to incorporate these talents to the industry, therefore gradually increasing not only the number of developers, but also the quality. This is the reason why training is important and an integral part of our plan,” explains Grinberg.

The first contest announcement for Mexican video game developers was made in 2008 with a response that even surprised the organizers: 104 projects were received from young developers from all over the country, who were not over 30 years old. Juego de Talento identified the most talented, awarded 6 teams and added a total of 10 groups to the incubator, which will enter the market as formal businesses this year.

In 2009, the second announcement proved that this business model is positively changing the rules of the game in the Mexican industry. A project theme related to Mexican history was proposed –taking advantage of the soonto- be-celebrated Mexican Independence Bicentennial– the response was overwhelming: over 400 teams, with larger and better quality projects than those of 2008; to the point that the President of Juego de Talento estimates that the number of incubated enterprises could easily double.

The Game is a Serious Issue
If video game detractors argue that they produce negative reactions such as inhibition, inactivity, lack of formal training, and even mental disorders, its defenders –among which Gabriel Grinberg stands– state that today young people interact differently with technology.

Recent studies prove that many players improve their neuro-kinetic abilities and visual reflexes, in addition to a new type of socialization, when various participants interact in front of a challenging screen.

The myth that video games are “for children”, and created to penetrate in fantasy worlds, has practically disappeared. In many countries developers have taken advantage of this situation to create various programs dealing with society, environment awareness, culture, music, sports, and various other topics.

“Juego de Talento’s annual contest always has a theme, because we want to promote education and be propositive. We must understand that today’s youth is hyper textual and very skilled in surfing the web. These traits represent an advantage and not an obstacle if they are steered correctly. Video games can offer a positive contribution to education of future generations,” Grinberg notes.

This is the reason why, Juego de Talento has decided to walk hand in hand with the Mexican Independence Bicentennial celebrations. In fact, the 2010 National Celebrations Organizing Committee is sponsoring the company because as Grinberg says, “they are interested in teaching Mexican history in a way that would be fun and most of all, alluring for young people.”

Randomness is “Out of the Game”
Gabriel Grinberg used to be an IT consultant. As a businessman today, he knows that right choices should be pursued while mistakes must be avoided.

Juego de Talento is a small company. Nevertheless, it expects to grow as the incubating projects become productive. By 2010, Grinberg expects to have at least 30 of these new developments. Furthermore, he is aware that one of the key elements of any industry’s growth is human capital development, thus the importance of specialized trainers. This year, Juego de Talento launched its first specialized video game development diploma course, jointly with the Sor Juana Cloister University: a five-month course that will allow students to immerse in the different stages of video game project development.

In 2010, more aggressive strategies will be used based on facts that have nothing to do with fiction, on the contrary, facts that are very real. Juego de Talento will open branches in at least 8 states of the country, to insure that its ‘talent hunting’ efforts are as broad as possible.

In the meantime, while expecting gradual results from the incubator as well as from the expert training endeavors, Gabriel Grinberg’s company will maintain its current income segmentation. Juego de Talento currently handles an approximate investment of 1.5 million usd, 40% of which was made by the three business partners while 60% came from sponsors The short-term goal is to reach self-sustainability, once its business model has been consolidated and the first enterprises emerge from the present incubation stage.

Camino a Santa Teresa No. 1679, Col. Jardines del Pedregal, Del. Álvaro Obregón, C.P. 01900 México D.F., Tel. +52 (55) 5447 7070