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The video game market in Africa has been doing quite well. In 2022, games sold in the region generated $862.8 million in revenue, up 8.7% year-over-year, according to Newzoo data.
Rodger Bush | Afp | Getty Images
The video game market in Africa is having a moment.
The gaming industry in sub-Saharan Africa is expected to generate more than $1 billion for the first time in 2024, according to data shared exclusively with CNBC.
The figures, compiled by Dutch research firm Newzoo for African gaming startup Carry1st, point to a thriving gaming market in Africa, where economic growth has been slow as the region grapples with persistent inflation, tough financial conditions and high net debt.
Sub-Saharan Africa’s economic growth rate fell to 3.6% in 2022 from 4.1% in 2021, According to the World Bank. It is expected to decrease further in 2023, to 3.1%.
Despite this, the African video game market has performed quite well. In 2022, games sold in the region generated $862.8 million in revenue, up 8.7% year-over-year, according to Newzoo data.
This is in defiance of a broader downturn in video game activity globally, as the tailwinds of the Covid lockdown fade and the rising cost of living has forced consumers to tighten their belts.
The global gaming market generated $182.9 billion in revenue in 2022, down 5.1% from 2021, according to Newzoo.
The most important thing in the data, said Cordell Robin Cocker, chief executive of Carry1st, which is headquartered in Cape Town.
“Looking back, we know that Covid was a significant contributor,” said Robin Coker. “But now that those benefits have receded, we’re starting to see slowing growth and even downturns in other markets.”
“We have the fastest population growth in the world,” he added. “People are getting online for the first time at a really fast pace. Most of it – more than 90% – is via mobile. There’s already a strong appetite for content.”
Venture capital firm Konvoy, which focuses on gaming-related investments, said it expects Africa’s gaming industry to grow 15.7% in 2023 and 13.6% the following year, higher than a previous forecast of 9.23% and 8.95% growth.
“These preliminary numbers for gaming on the continent are promising, but long-term trends of population growth, internet penetration, and smartphone adoption paint a picture of amazing growth for gaming on the continent,” said Jackson Vaughan, managing partner at Konvoy. CNBC.
Smartphone adoption, in particular, has boosted gaming prospects in Africa. The region’s higher-than-normal youth population means that digital technology has been strongly embraced.
By 2030, 87% of the population in sub-Saharan Africa will own a smartphone, according to mobile industry body GSMA, up from 51% in 2022.
This is thanks in large part to falling smartphone prices and the growth of “digital native” users.
Africa is overtaking the global gaming market
The global gaming industry is expected to return to growth this year, with analytics firm Ampere Analysis forecasting it to increase by 3.3% in 2023, driven by mobile gaming returning “in some form”.
But it is a far cry from the sharp growth in 2020 and 2021, when the coronavirus pandemic forced people indoors and allowed them to spend more of their free time playing games.
“The potential for disruption to user acquisition from future changes to platform privacy, combined with a broader audience that is less resilient in the face of changing macroeconomic conditions, means that the performance of the mobile gaming market is becoming less predictable than it is,” said Louise Shorthouse, analyst at Ampere Analysis. It was in the past.”
In Africa, most of the growth in gaming has been driven by smartphone usage.
According to Newzoo, mobile games generated $778.6 million in revenue in 2022, which is about 90% of all game sales.
Nigeria led the way in total annual gaming revenue, drawing $249 million, followed by South Africa, which generated $236 million in revenue.
South Africa was previously the largest video game market in Africa, according to Newzoo.
Kenya ($46 million), Ethiopia ($42 million), and Ghana ($34 million) were the next income-generating countries.
Ethiopia had the highest year-on-year growth rate – 13% – while Uganda was the slowest growing gaming market, increasing just 6%.
According to Niuzoo, Nigeria and South Africa contributed twice the revenue of the other G8 countries combined. All ten countries achieved year-on-year sales growth.
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