Dark horse or DOA: Will the Zeebo fail in Brazil?

(UPDATED AUGUST 27: The Zeebo debuted in Rio on June 5, with a limited release, and reviews are not very positive so far. Some gamers are trying to be diplomatic out of respect for a "national" product, but none of the games gets a big thumbs up due to poor graphics and controls and slow load times. "Celular de mesa" or "tabletop cell phone" is being used as a description, and gamers are already mocking the inferior quality.

Tectoy finally released Resident Evil 4 [US$13] and Ridge Racer [US$7] after a 6-week delay, and if the comments on the company's blog are any indication, someone might want to start the Zeebo death pool. The comments mostly include words like "sad," "disappointment," and "shit", and criticisms like, "I want to shoot zombies, not Smurfs." They're outraged that the company is charging so much for an inferior mobile port when a pirated PS2 game of much higher quality costs significantly less.

There are also various problems that need to be worked out, such as the system crashing at random times and, weirdly, incorrect team colors and symbols in FIFA 2009.

Now that Zeebo Inc. has announced plans to expand into Mexico in a partnership with Telcel, Brazilians are extra pissed off because the Zeebo will be sold for US$50 less there and will come with additional features. They're also annoyed by comments from John Rizzo, the company's CEO, who brushed aside the massive amount of criticism of the console in Brazil by claiming it's only "hardcore gamers" who don't think the Zeebo is super-ZOMG-awesome. Rizzo went on to say that the woman who rejected him at a bar last weekend wasn't that hot anyway.

Based on comments on Mexican blogs and forums, Rizzo might want to stock up on sour-grape-flavored soda because it seems that Mexicans are even less enthused about the arrival of the Zeebo, since due to their proximity to the United States, they can buy newer consoles at a reasonable price.

At best, Brazilians are holding out hope that the console will show its true potential by its nationwide release in October -- but in an era where technology moves quickly, will anyone be around to care?)

In January, Gamasutra interviewed John Rizzo, the CEO of Zeebo Inc. It was an interesting article in that three months after official news of the console hit the media and only one month before the trial run of the system in an undisclosed Brazilian city was expected to occur (and didn't), even the head of the company seemed to have no idea what the current or long-term business plan was.

I first heard about Zeebo last January, when it was still in the planning phase and codenamed "Jeanie," from an old friend who worked for Tectoy Mobile in Brazil and moved with the project as it transtitioned into the San Diego office. He was coy about the subject, but he told me enough NDA-violating information that it piqued my curiosity. When I asked him what he thought about the Zeebo's chances of success, he answered, "We'll sell at least, hmmm, 100 in São Paulo." Not a lot of confidence.

I read and post to a couple of Brazilian gaming forums and most of my Brazilian friends are gamers to some extent, so I've gotten a lot of feedback about the system and about Tectoy (the Brazilian gaming company that owns 57% of Zeebo to Qualcomm's 43%) and the Brazilian gaming market in general, the kind of feedback that's absent in the English-language sites that have posted news about the Zeebo.

On those sites, Westerners praise the perceived innovation of the system, primarily as it's from a company in a developing nation where don't they still play with sticks and rocks for fun anyway, and they gush over how wonderful it is that even poor people in emerging markets can now share in the technology that those of us in developed nations have enjoyed for decades.

BRAZIL IS NOT RURAL SOMALIA, PEOPLE

It's rather insulting to treat Brazil like it's straight out of "The Gods Must Be Crazy." People aren't going to run around the streets of Rio in a frenzy because a Coca-Cola bottle fell from the heavens. In many places, Brazil is as modern as any Western nation, and in other places, even if the conditions are poor, the residents aren't living in a bubble.

They have access to the Internet, they have TVs, they have electronics stores... they know what's out there. Even if the existence of an Xbox 360 is completely irrelevant to their lives, it's ridiculous to assume they, particularly those in the younger generations, don't know what one is or don't know that the Zeebo is a technologically inferior and antiquated product.

INSULTING POTENTIAL CONSUMERS

In an interview with the Financial Times (23 March), Rizzo said: “Instead of the consumer having to take a bus and go to a favela [shanty town] to buy pirated software, they can sit on their couch, turn on the Zeebo console and buy directly from home."

What? Seriously? Now they're playing into the stereotypes that citizens of developed nations have of Brazil, like it's nothing but a lawless land of violence, drug trades and big ol' bumbuns bouncing along to funk carioca. Maybe MC Créu can write a baile funk jingle for them: "É Zeebo! É Zeebo nelas! Vambora, que vamo! Pra joga Zeebo tem que ter disposição. Pra joga Zeebo tem que ter habilidade."

Or I'm seeing a commercial set on a bus: Eu podia tá matando, eu podia tá roubando, mas tô aqui, vendendo esse primeiro console do Brasil-sil-sil-sil.

PIRACY IS ENTRENCHED

I'm not justifying piracy, but as someone who modded her Wii and bought countless pirated games in Brazil, I know that piracy is completely accepted in the country, even among the middle classes. You sure as hell don't have to travel to a slum for your pirating needs. I've even seen pirated PS2 games in places as random as pharmacies.

If the Zeebo is targeted to lower-income Brazilians who can't afford a current-generation console, there's a good chance they already live in a favela and can walk outside of their door to buy pirated software. They won't feel any guilt about it and are only looking out for their wallets.

If they don't live in one, they don't need to make an epic trek of dodging bullets and glue-sniffing children to go to one to buy a modded PS2. And they won't feel any guilt about it either because they're looking out for their wallets too.

So, why would you buy a Zeebo and pay US$10 to download a mobile port when you can walk down the street and pay US$5 for Final Fantasy XII?

Oh, and those dreaded favelas? In them are LAN houses, where for US$1-2/hour, these poor children who surely will be wowed by Quake 1 are, um, already playing PC games like Half-Life, GTA, Call of Duty and Counter-Strike. And they're probably pirated copies too.

"CRUEL BRAZILIAN REALITY" USED TO SELL CONSOLE

In a more recent Gamasutra interview, Reinaldo Normand, one of the creators of the Zeebo said, "For us, Quake or Tekken 2, well, we played that ten years ago, right? But for most of these guys, they might be playing for the first time." Except Normand is Brazilian, meaning if he played it 10 years ago, so did other Brazilians... Brazilians who aren't exactly going to get down on their knees and thank Deus for an outdated game.

I'm not sure who should be more insulted by this campaign of disinformation: Brazilians who are being portrayed as if they're all extras from "City of God" or the Western press who are being treated as if they're too ignorant and uncurious to do a little research because this conveniently fits into their notion of what a "third-worlder" is.

They're also being disingenuous in presenting the cost of consoles in Brazil. Contrary to what they're telling English-speaking audiences, only an official Wii costs US$1000 (and that's due to ridiculous protectionist import taxes). A modded, black market one costs about US$500 and, well, that's what everyone buys. Still expensive but it's not that unrealistically out of reach, particularly when a Zeebo is expected to retail for R$499-599 (US$240-288).

That's not an "affordable" cost in Brazil for the market they're allegedly targeting. It's ridiculously expensive for what the console offers, on par with releasing the Atari Jaguar for US$1500 in Western markets today, and it only seems like a decent alternative cost-wise because of the jacked-up, protectionist import taxes in the country -- taxes that Tectoy itself, I'm told, helped to usher in decades ago. If Brazil were open to competition, Tectoy would be lucky to give away Zeebos, but with the market as closed as it is, they can charge a fortune for outdated technology and it's Brazilians who suffer for it. This console is hardly a "favor" to them.

It's interesting to note how differently they present the console to Brazilian and Western audiences.

SO, WHO IS THE TARGET MARKET?

Honestly, I have no idea.

If you're so poor you can't afford a PS2, which is the standard for consoles in Brazil, and instead have had to settle for a Polystation or Tectoy's Mega Drive 3 with 86 embedded games, I can't imagine that you can afford the more-expensive and untested Zeebo.

If you can afford a PS2, that's what you'll buy, especially now that Sony has announced a price cut and will be manufacturing the system in Brazil, because that's what you know, that's what your friends have, and that's what will provide the most bang for your buck with its extensive library.

And if you're in a position to spend a little more, you'll buy a Wii, which is also aimed at the casual-gaming market and, like the PS2, is a known quantity and has a huge catalog of games. Or you'll buy a DS or PSP. All of which you can mod.

The company says 10-13-year-olds are the target demographic, but by that age, kids are aware of what consoles are out there and which ones are "cool." If they said this was more of a "My First Wii-Clone Console" for kids from 4-8 and drastically lowered the price, I could see it being a success.

It seems what they're banking on is the idea that Brazilians, as a whole, feel unethical and embarrassed about buying pirated games and have just been waiting for the opportunity to buy a console with affordable legitimate ones, no matter how poor the selection. I think they're seriously underestimating the acceptability of piracy in the country -- or at least having the option to pirate games, if that's what one chooses.

PRIDE IN NATIONAL PRODUCT?

But, I know what you're saying, isn't there pride in having a national product? Such as something put together by teams in close to 10 countries can be considered "national."

Some Americans will buy American goods no matter how poorly produced, but I don't know how many Brazilians will say (or can afford to say), "Huh, I can buy the modded version of a well-known foreign video game system with an extensive library of cheap pirated games for R$350 or I can spend R$499 on the unproven video game system of a Brazilian company who has spent the past few years supporting themselves with karaoke machines and 10,000 versions of the Master System. Yes, I'll go with Tectoy!"

There's patriotism and then there's stupidity, and if you're earning a monthly salary equivalent to US$500, there's not a lot of room for stupidity -- even if you can spread the cost over 72 convenient payments at Casas Bahia.

And don't underestimate brand-name appeal.

The best jeans I've ever owned were from Brazilian stores, but most Brazilians I know think Gap jeans are the greatest, even though they're poorly made and expensive. But it's American and has a cachet that most Brazilian stores don't. Gap means you've made it. Imported body sprays from Victoria's Secret means you've made it. A PS2 or PS3, an Xbox or Xbox 360, or a Wii is a sign you've made it.

A Zeebo will, unless it pulls off a successful marketing campaign and adds features that are unique to the system, be a sign that your parents just don't love you very much.

LACK OF MARKETING

And that's part of the problem: Where is the marketing for the console? Well, other than the current campaign to encourage consumers to buy a Zeebo so they won't get shot going to buy a PS2.

I've heard from friends that Tectoy's marketing is notoriously bad, and on gaming forums, even those who would like to see the console succeed are slowly losing faith in it. To give you an example, Tectoy released to the Brazilian media a demo video of an upcoming in-house game for the Zeebo (Zeebo Extreme) using unlicensed music from The Strokes. So, a company bragging about its console being anti-piracy and pro-copyright apparently doesn't believe in extending those rights to musicians.

Besides that, if you weren't looking for information, you wouldn't find it.

The Zeebo was unveiled to journalists in Brazil back in November, and since then, there's been little news about it from Tectoy, even though it's had an official release in Rio. I guess you could forgive journalists for their lack of interest, since the console was presented by its Brazilian creator with all of the enthusiasm of a mildly depressed housewife with a Xanax addiction.

If you look at Tectoy's blog, where employees ostensibly are meant to highlight the awesomeness of the company to consumers and get them excited about new releases, the posts about their "revolutionary" system have been sporadic and almost all are links to outside sources who scooped them on their own news.

There's a reason for the negative maxim "Brasileiros são uma praga" ("Brazilians are a plague") when it comes to the Internet, because Brazilians love new technology and they will flock to it and sing its praises. But they haven't been given a chance, and I have to wonder if that's because even Tectoy doesn't have faith in this console or they just don't know how to market it. Or if, as some Brazilian gamers and investors have speculated, this isn't so much about selling a console as it is about generating royalties from their patent.

DELIVERY SYSTEM

The console is innovative in its delivery system, even if the 3G network is still bad in most areas -- but I question how long Zeebo can afford to subsidize users' free access to the network, especially if the console doesn't take off.

I'm guessing that once they have users hooked and if they add support for online multiplayer, they'll start introducing tiered plans, something that Rizzo seemed to hint at in an interview.

It's true that online distribution allows for the development of games like World of Goo and with larger studios afraid to stray too far from past successes, this model encourages smaller teams and more risk taking, and I think that's what the industry needs.

But in Brazil, like much of the world outside of the US, there isn't the same culture of buying goods online -- people generally prefer to exchange cash for a product in hand -- and I don't know how well it'll go over that you (apparently) have to repurchase deleted games. Will people in countries like Brazil and India accept the concept of essentially leasing games rather than owning them? I have serious doubts.

INCENTIVE TO BUY GAMES?

Another problem with the Zeebo is that casual gamers don't buy as many games as hardcore gamers. Wii might be the best-selling console but how many owners have more than Wii Sports and Wii Play? Price is an issue for casual gamers, but for many of them, they simply don't need the latest games.

For a good portion of Brazilians who own PS2s, many of them care about one game: Winning Eleven. They have their weekend soccer championships with their friends, and that's all they need from the system.

At release, Zeebo will come with six games either stored in the memory or available for download: Super Action Hero 3D, Brain Training, Need For Speed Carbon, Prey, Quake, and FIFA 2009. A handful of others, almost all mobile ports, will be available at release.

The soccer game alone, especially for a lower-middle-class family, would provide enough replayability for many owners that there wouldn't be much incentive to buy new releases unless they offer something truly unique (e.g., the ability to play online).

On the other hand, even though its library is currently stocked with mobile ports and a rather uninspired original game from Tectoy itself, it could have the potential to become an indie developer's dream (or shovelware dumping ground). And I think that's where the key to its success lies, in attracting local indie developers (like the makers of Taikodom and Capoeira Legends), but how freely will they distribute the SDK and how easy will the game-approval process be to navigate?

WHAT NEED IS IT FILLING?

But what's the purpose of the Zeebo? Is it really a video game system designed to attract "the next billion gamers"? Or a vanity project for its creators?

Is it for developers, who are always searching for new ways to cripple technology and to force consumers to use their products as they see fit in the name of preventing piracy? Is it a new way for Qualcomm to earn money through licensing?

Or is it little more than a cynical ploy to generate profit through advertising to a captive and largely unsavvy and uneducated market?

"Enxergamos um potencial muito grande para advertising nesta plataforma. Vamos comercializar espaço, sim", afirmou Fernando Fischer.

"We see a very huge potential for advertising on this platform. We're going to sell space, yes," confirmed Fernando Fischer, the CEO of Tectoy.

I guess if Tectoy ever hires a marketing department, someday we'll know, huh?

***An analysis of Zeebo in the Chinese market
***Here's a great analysis on the Zeebo's chances in India: Why the Zeebo Will Fail in India

tokyo game show, unicom, omobile, china mobile, bpl, Tata Indicom, hutch, vodafone, airtel, aircel, mtnl


yappa, japan, mike yuen, gdc, gdc2009, games conference, lagc