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Mayday Games: A Cautionary Tale (How Not To Open Up Your Market in Brazil)
Introduction OK I’m, Mayday Games’ founder Seth Hiatt and I just got back from a 10-day trip to São Paulo, Brazil. It was my first effort to open up our licensing and distribution in Brazil. I went at this time because I wanted to coordinate my efforts with Anime Friends 2016, the largest convention that has something to do with Board Games in Brazil, at least in São Paulo. We have been shipping games and accessories to Brazil for several years, both direct to customers and to some stores buying directly from us. Recently we licensed two of our games (Get Bit and Dead Man’s Draw) to one of the admittedly smaller publishers in the Brazilian market, Conclave Editora. They launched Dead Man’s Draw at Anime Friends 2016 and I was there to have meetings but also to support this release. So what was my experience? Let me break it down for you. Preparation First, I let stores and other interested parties know that I would be coming down to Brazil and that I could hand carry some limited quantities of product to the show for pick up, so we put a preorder up on our website for a few days and got about 20 orders for pickup at the convention. I took a lot of samples of our games and some of these items with me in my luggage. I also put together an invoice of exactly what I was bringing into the country (product) along with the value as per the factory invoices for the cost of manufacturing these goods. I also brought along invoices from each factory for each item that I brought with me to “prove” the true value of the goods was what was on the invoice, should I need it. After reading online and checking things out, I figured bringing in the invoice and supporting documents and “declaring” the goods would be totally fine. I was prepared to pay the 50% import tax on the goods to get them into the country and planned to do just that. Landing Once I got to São Paulo I collected my luggage and went through immigration without a problem. This is during the 6-month “visa free” window around the Rio Olympics so I didn’t need a visa or anything, so it was a breeze. As I approached the “Nothing to Declare” or “Goods to Declare” lines I was tempted to go through the “nothing to declare” but I knew there is a 50% fine if you are caught going through with goods that should have been declared, but didn’t, and I wanted to be up-front about what I was doing. I presented myself to customs officials with my invoice and goods, and was eventually told that because of the quantity of good being brought in that they were considered “Commercial Goods” and that they could absolutely not proceed into the country without legal importation, a process that would take at least a week and would require me to pay an agent quite a bit of money to accomplish. I told them the goods were for demonstration and that I wouldn’t be collecting any money for the goods and then I begged to allow me to keep a least one of each game to show to other publishers as samples, no dice. My luggage was seized and put into limbo at the Cargo Terminal. I should mention here that I speak pretty good Portuguese and that all of this was in Portuguese. I won’t bore you with the details, but after two full days of running around and trying to get the goods I eventually ended up at Mauro’s office, the internal auditor of the entire international airport, along with the head of the Receita Federal, the Federal Tax Authority that needed to be cleared to get my goods out of the Cargo Terminal. In the end Mauro and this other fellow called the immigrations/customs people over in the airport and explained that they should have let me fill out a Temporary Importation form (Importação Temporario) and that this would have allowed me to bring the goods through, regardless of the quantity or value. From there I could then pay an agent to change the importation declaration from Temporary to Permanent by paying the Import Tax or possibly even just leave the country with none of the goods and pay the tax upon exiting the country. These two guys helped me fill out the forms and got me my bags late on the 2nd day of this frustrating process. I can’t imagine tackling this without speaking Portuguese and I don’t recommend you try it. Now I know what to do and have some contacts to help me do it, so next time it shouldn’t be a problem. Licensing I had some great meetings with several game publishers down in Brazil. For those of you interested in licensing to Brazil, let me give you a brief rundown:
- GROW JOGOS: Think of this company as Hasbro meets FFG. They are huge and have the widest and oldest distribution into all the mass market stores. They were a bit late to enter into the “euro style” games market so they don’t have a lot of licenses for many of the well-known games, but what they license, they can sell. I would say they are our number one choice for new licensing deals due to the type of games we product and their distribution network. I had a 2+ hour meeting with one of their top guys at their offices in São Bernardo just south of the Capital.
- Galapagos Jogos: These guys are the Asmodee of Brazil, they have almost all of the most popular games licensed to Brazil and are really in control of the market in many ways.
- Devir: Devir is a great company and they have very solid sales. You may have heard of them from their games in Europe too, they have offices in Spain and Portugal but started right there in São Paulo way back in 1986. Their owner is very down to earth and a good man.
- FunBox Jogos: Funbox is very new on the scene and hungry for market share. They are great people and are aggressively launching new titles, they could be very big indeed in a few years.
- Conclave Editora: Another up-and-coming company that does great work and is also expanding. They also are branching out to distribution, something that Brazil really doesn’t have much of yet.
- Other Companies: There are a lot of other solid new companies with a few licenses each and all of whom seem to be stable and growing. There are perhaps 15 of these.