South African eSports market outlook

Posted on October 5, 2017 12:08 am

As an emerging industry, eSports in South Africa gives sponsors a chance to target the millennial audience that makes up the majority of eSports fans. These people can be hard to reach through traditional forms of marketing.In general, eSports organizations in cities like Cape Town and Johannesburg are now able to financially support themselves and most of the earnings for players comes from tournament prizes.Those who have joined a professional team, top eSports players in South Africa can earn up to $50,000 a year.Computer video games have been organized as a professional sports competition for several years now in the country. Several eSports athletes and clubs have been formed, competing and even winning at the local and international level.The esports market has certainly hit its stride of late in Africa, and seems to be gaining some serious traction. It has been steadily growing an audience fuelled by participation in gaming. It’s taken some time to reach critical mass in South Africa, but a few factors have definitely accelerated to the current position.One of them is a changing gaming market economy, where publishers are able to sustain monetisation for years from a several years old product, and one of the best ways to keep the fan engaged is through eSports. Once the games industry giants truly embraced the potential of their own titles power to capture a loyal audience, the whole game development process has changed to retain and cultivate a growing eSports fanbase and South Africa is one of those countries together with Egypt and Nigeria.The development of South African gaming teams and big brand sponsorships are set to skyrocket in 2018, as companies realise the potential of the target market. Indeed, new estimates your blogger has seen show that more than 60% per cent of South Africans aged 20 and below play video games, with more and more growing significant fan bases on video platforms.Every week the gaming community is breaking new barriers and expanding the reach of what few South Africans previously thought was possible. The same report on South African eSports market predicts that eSports will generate revenues of $15 million in 2018, up 25 percent from about $4 million in 2016, and will likely have an audience of regular and occasional viewers of close to 9 million people.

The very idea that South Africans may be willing to watch other people play competitive video games for big money prizes may surprise some. These sceptics often underestimate the South African annual market size as being in the millions of dollars only. Conversely, eSports advocates say the current market size, believing annual revenues are already in the millions, and comparable to major league sports in the country. Today, a major eSports event may attract thousands of people watching live, and millions watching over the Web. This has been interpreted as meaning that eSports is bigger than many other sports which is true when measured by audience size for an individual event. The financial numbers are becoming so substantial that eSports simply cannot continue to be considered some sort of underground hobby. Whether this is the 100,000 South Africans who have purchased CS:GO for around $15 or the thousands of dollars of prize money that players and teams have earned at major esports tournaments in South Africa in 2017 so far, this is the real deal. It is rapidly professionalizing, it is of global scale and it has a passionate and engaged fanbase like any other sport, its success should not be a surprise to anyone. Revenues for eSports are predicted to grow 30 percent in 2017, which is better than most mature sports in South Africa and that is especially impressive for a new entertainment market. Its clear that eSports is approaching an upward inflection point, one Cape Town based analyst predicts that eSports in South Africa alone will leap from $4 million in 2016 to $50 million in 2019 which is triple the projected 2017 growth over 2016.eSports in South Africa does reach hundreds of thousands of people on a quarterly basis, and over five million occasionally making it comparable to some traditional sports.South Africa tech and media companies are paying attention to eSports, for both growth opportunities and because it appeals to a narrow and desirable demographic where 80 percent are millennials aged 18-34, and 70 percent are men.Although eSports might not match or surpass traditional sports in South Africa soon, its potential business value is clearly too significant to ignore.

Contador Harrison