The Zeebo Console « Tex Pine – Game Production and Business Articles

The Zeebo Console

Today Tectoy is announcing a major breakthrough for the Brazilian game industry: the Zeebo game console. Zeebo is one of those rare systems released outside USA or Japan. This is exactly why it has a high chance of success.

Introduction to Zeebo

Zeebo is a game console based on Qualcomm technologies for high-end mobile devices. It has a nominal processing power somewhat equivalent to a PSP, OpenGL|ES 1.0 hardware compatibility over a dedicated GPU and is capable of 3G mobile network connection (HSUPA), scaling back at 2.5G (EDGE) or 2G (GPRS) where necessary. It features BREW 4.0 as the operational system, three USB ports for joysticks and accessories, one SD card port, and composite video output along with stereo audio. There is no media – games are downloaded through ZeeboNet network, making Zeebo the first of the forthcoming download-centric generation of game consoles.

Clearly the specs of the system aren’t designed to match the technology of the current seventh-generation. But this is not the point. The goal is rather to implement viable solutions for two major problems of the console business on developing countries – price and distribution -, while presenting good value for players.

The Problem on Price

As I once wrote Brazilian game market suffers greatly from piracy. The first major reason is price.

Due to heavy taxes and high logistical costs, an official console game costs around US$ 110 and PC games around US$ 70. Considering the per capita income is US$ 9k against US’ US$ 47k, one could argue that buying official games is not only 2-3 times more expensive in absolute price, but also 19 times more expensive when income is factored in!

But Zeebo games are downloaded using 3G networks. As a mobile service instead of physical units, taxes are much lower and logistical / manufacturing costs are non-existent. Therefore, games can be priced from US$ 4.45 to US$13.10.

Digital Distribution Is The Key

The other major reason for widespread piracy is the distribution aspect itself. In a country where logistics are expensive due to infrastructural problems and illegal street vendors are commonplace, one just can’t compete on regular terms. Black-market reselers nowadays can get new releases way faster and way cheaper than any regular, tax-payer CD reseler will ever be able to.

But a solid digital distribution model is a viable way to fight back for two reasons. First, new game offerings will be instantly available from ZeeboNet to all players of the country, which is faster than even the fastest black-market reseler. Second, the library available online will eventually feature much more game variety than a street vendor can carry on backpacks. (Also enabling a Long Tail-based strategy.)

Think Global, Act Local

Brazilians do like video-games and play a lot. Despite the fact PS2 never had any official representation in the country, Brazil alone accounts for 2% of all PS2 units in the world. Microsoft estimates over 500 k units of various game consoles are imported every year, and over 300k 3D video cards for PCs are sold every month. But strategies and models of traditional cardboard-and-plastic distribution of global actors have proved again and again to be completely inadequate for the country’s peculiarities.

The game industry needs products and strategies that adapt to local behaviors instead of ignoring them. It needs strategies that treat pirates as the competitors they truly are today and offer sound advantages for buyers of official products.

I firmly believe the Zeebo proposal is a viable business model option that can finally start to monetize and legalize a game market that already exists but is dominated by mafias. No doubt this is a brave move in a country Edge Online once defined as a member of The Lost Continent.

I’ve been working on Zeebo games production for 5 months now and it’s pretty exciting to be a part of this innovation.

UPDATE: also check out my latest post on Zeebo, How To Fight Back at The Lost Continent

This entry was posted on Wednesday, November 12th, 2008 at 2:35 pm and is filed under Entrepreneurship, Markets, Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.