Gaming industry in Africa

Posted on March 21, 2017 12:00 am

Smartphone and tablet are the leading games platform in African market and and in 2016 generated an estimated $1billion revenue compared to $376 million for PC games and less than $100 million for console games, up only seven and eleven percent respectively from 2015.However the figures available to me show the mobile gaming industry expect average revenue per game by platform to vary significantly. Experts forecast it will depend per console game available, per PC game and per mobile game. While tens of African companies create mobile games, industry experts expect only about 4 mobile games companies will gross over $100,000 in 2017. One key characteristic of Africa mobile games market is low barriers to entry.The latest generation console or PC-based game costs tens of millions of dollars to produce, a similar sum to market, and can take several years to develop. Mobile games can be created in mere hours.This has contributed to a profusion of mobile games titles. As of the start of 2017, estimates show app stores will offer more than 3,000 mobile games compared to roughly 200 titles available for games consoles and PCs which have been developed by game developers based in Africa. Every day a further 4 mobile games titles are launched on a single platform. The immense number of mobile game titles renders many new titles invisible without substantial marketing spend. If mobile games publishers cannot afford a TV campaign, they could use outcome-based advertising, such as app-install ads. However this can be expensive. Africa mobile games publisher may pay several dollars per download with no resulting revenue. And since the predominant business model for mobile games is freemium, whereby games are downloaded for free and additional content is charged for the vast majority of mobile players can and do, spend tens of hours playing without having to pay a cent. The large investment required for a mobile game to stand out from the crowd is likely to keep the market stratified in 2017.

Your blogger expect about 90 per cent of Africa mobile games revenue in the top 10 titles to be earned by the top 3 publishers in each region and that will leaves the remaining 10 percent of mobile games revenue to be shared among many hundreds of developers. One study of 150 developers found that 78 percent generated no revenue, 12 percent made less than $50 a month, and 10% made less than $500 per month.Given African market characteristics, experts predict that the rise of mobile games, in terms of revenues, will not affect console and PC games revenues in the medium term but the three platforms will co-exist, with each serving largely distinct needs, underpinned by different business dynamics. Games will remain a principal usage of mobile devices and predict that in subsequent years African mobile games revenues will continue to grow, propelled by both a rising base of mobile devices, and a marked increase in device specification, particularly for smartphones. Africa has seen the rapid adoption of the current generation console hardware has driven growth of software and ancillary products including, accessories, interactive toys and mobile games. Video games industry growth has been led by the mobile phone sector and consoles with current generation consoles increasing in sales volume.In South Africa, console software was the best performing category experiencing 8 per cent growth in revenue over last year. Digital is now greater than half of the total games market accounting for 72 per cent of sales while digital extras, which include season passes, map packs and game expansions, boomed with 29 per cent growth in 2016. Games publishers are increasingly adopting the in-game purchase business model which is greatly contributing to the growth of digital extras market but physical products in the games market remain important with consumers indicating a preference for physical copies when purchasing as a gift or as a collectable or where there might be technical limitations such as download speeds or data caps. With the rapid growth in downloads and mobile gaming, the future looks bright for mobile gaming and gaming in general across Africa.

Contador Harrison