Portugal sets sights on being video gaming hub; can it attract the tekkies to staff it?

Portugal’s small but innovative video game sector has ambitions to become a worldwide hub.

So far there is a clutch of around 120 companies in Portugal providing work for 1,000 people, but until recently these companies had been spread around Portugal with no cohesive sense of an industry cluster concentrated in one or two specific areas.

That, however, looks set to change. Associations have been set up and more importantly a gaming hub created by Unicorn Factory Lisboa.

Business daily Negócios reports that the fledgling sector even has a project financed by Portugal’s Recovery and Resilience package.

According to the latest data published by the National Statistics Institute (INE) for 2022, there has been an uptick in business turnover from €24 million in 2021 to €38 million in that same year.

And the Association of Producers of Portuguese Video-games (APVP) is optimistic for 2024.

The organisation’s president, Jeferson Valadares, told Negócios that they had a €50 million turnover target for this year, although he stressed it was more a desire than a certainty.

The official numbers for 2023 are still not available and the actual sector itself has not issued estimates since the disperse nature of the business makes it difficult to collect and collate statistics.

The APVP president said that the last two years had been very difficult because the video-games market overall has “mirrored the technology market with redundancies and cancelled projects.”

However, Portugal managed to avoid this tendency since jobs are being shaved in the United States and England and being transferred to countries like Portugal that are cheaper in terms of the labour market.

Nevertheless, the sector in Portugal has many remote workers attracted to companies overseas in countries that offer better wages. However, this can make it difficult for relocated or homegrown companies that can only offer lower salaries to compete in the labour market and attract technology savvy professionals.

According to data from the INE, in 2021 the national gaming sector in Portugal paid out €7.7 million in salary costs with the average gross salary rising from €2,200 in 2021 to €2,900 in 2022, but does not include either Portuguese or foreigners working for companies based in other jurisdictions.

And this problem of living in one country and working for a company based in another in order to earn higher salaries is a problem for Portugal’s gaming sector, and must certainly be an issue for the founders of other tech firms. How Portugal can level up salaries in order to attract the best professionals is still a thorny issue.