Well, I want to talk about that because I see many people, even brazillians claiming that console gaming is low in brazil due to piracy, and I want talk about what I think could work here.

1) don't expect to profit a lot with software. Brazilian people are OK to pay overpriced hardware, but don't expect than to spend a single coin in software. Taking cues from smartphone market, people here pays a lot for smartphone, but once paid the hardware they hardly spend anything in apps. Even among iphone owners, most use only free apps. So, my tip is profit a lot on hardware and see software income as something extra, there come my next tip.

2) The payment options are more important than the price itself. Low income people here buys phones that costs 2x or 3x times theyre monthly income and are happy with that, as long you offer a good financing plan. They don't care about the price, theycare if they can the monthly payment.

3) Localize games, voice and text.

4) For selling games, make them cheap enough, the current price point of 149 brl for releases is great, but a 99brl would be even better.

I'm the only brazilian who spend a lot in games lol

I have a hard time believing Brazilians would buy overpriced consoles and not buy games for them...

There are a few that do ( me included), but the case is we are exception. I think companies around here are excpetionally lazy when adapting to our reality. Online content stl charged in dollars and require international credit cards from specific banks... A 2000 brl ps4 is OK if games are cheap. Here people pay over priced hardware all the time ( including cars, house appliances and eletrônica), but will complain to pay 5 brl in a smartphone app.

I really want Brazil to be a big market. At least as big as Germany.

Believe me, they would. Here is normal to see people with 3000 brl tvs and 500 brl bd players running dreadful quality bootlegged DVDs they get 3 movies in a disc for 5 brl. 

Getting the economy in order with higher tarifs on foreign products

You know that's just what happens when you live in low tier Portugal.

Yeah I said it, venham cá zucas.

JK a vossa situacao é uma pena

Sony and other pubs can't sell their games for like 1-2 dollars, as their system isn't regionlocked and people could buy brazilian games for dirt cheap and play them elsewhere. Also smartphones==consoles. People here in Norway are also reluctant to pay for smartphone games, but console games sell well. Also if the PS4 were to be expensive but software would be really cheap, how would publishers make money? And if they don't make money, why localize their games?

Good point.

I guess one strategy to try would be steam model of pushing digital games via massive sales.  Not sure how digital goods are taxed there, but if people get accustomed to buying games during seasonal sales for 40-75% off might go a ways to lessening tax burden and appeal of pirating.