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Global Content Trumps Local Initiatives in African Gaming Sector

With Kenya now set to become the world's fastest-growing market in the video-games sector, the potential of Africa is being reappraised by many in the digital entertainment industry, although local content remains a low priority.

Photo: Cosplay comes to Cape Town as the Electronic and Gaming Expo rolls into South Africa.
Cosplay comes to Cape Town as the Electronic and Gaming Expo rolls into South Africa.
Photo: Cosplay comes to Cape Town as the Electronic and Gaming Expo rolls into South Africa.
Cosplay comes to Cape Town as the Electronic and Gaming Expo rolls into South Africa.

Anyone who's been to South Africa will be familiar with the ubiquitous 'combi' taxis – which take their name from the unmistakable VW Kombi/Camper model – that weave alarmingly through the traffic before suddenly swerving to a halt to pick up passengers, with scant regard for the rules of the road or, indeed, for any rules whatsoever. Now, they've been immortalised in Skadonk Showdown, an X-box game with a distinctly South African feel.

The gameplay sees you racing minibus taxis through the menacing streets of downtown Johannesburg in what was described by one review site as "the most South African game we've ever seen". In truth, it's one of the few games that speaks to the South African end user, with locally made content holding up a mirror to the reality of daily life in the country's cities. It's pretty much the exception, though, with local content something of a rarity in Africa's video-game industry.

Overall, it's the international titles, produced by such global entertainment giants as Sony and Disney, that dominate the industry. As has been the case for most entertainment media, video-game content has been defined by globalisation. To be fair, to a large extent, consumer tastes are influenced by global brands and consumers are always attracted to the best content, whether it's been produced locally or not.

This trend was clearly evident at South Africa's recent Electronic and Gaming Expo, with the latest PlayStation virtual-reality games proving the biggest draw at the event. Summarising the current state of the sector, one exhibitor – Nick Hall of the Independent Institute of Education, a company looking to train Africa's future game developers – said: "Locally produced content only makes up a tiny portion of the games consumed in South Africa."

Indeed, it is the big international titles that dominate South Africa's gaming market, with the FIFA soccer series being the overall best-seller. As a sign of the relative unimportance of the domestic sector, across the whole of the total South African gaming market only about R200,000 (US$15,500) was spent on locally produced games.

Assessing the scale of the problem, Hall said "To my knowledge, apart from such notable exceptions as Broforce [a 2015 'run and gun' platform game], there have been no concerted efforts to produce a commercial title that reflects local identity or culture. As an industry body, we have been very keen to encourage such initiatives.

"There has, however, been some progress with two new locally created titles – Gorn and Semblance – due out next year. A number of South Africa's development studios are also working on projects for some of the big names in the industry, including Disney, Bioware, Riot and NCSoft."

The African Video Gaming Markets

Regardless of the size or impact of the home-grown sector, sub-Saharan Africa's video-game industry is set for solid growth over the coming years, at least according to Entertainment and Media Outlook: 2016-2020, a recent report by PwC, the London-headquartered global management consultancy. The report reviews the digital entertainment sector in three key African markets – South Africa, Nigeria and Kenya – and, based on historical data from the period 2011-2015, extrapolates the likely industry developments up to 2020 for 11 entertainment and media segments.

Commenting on the findings of the report, Vicki Myburgh, Entertainment and Media Industry Leader for PwC Southern Africa, said: "In spite of widespread disruption in the entertainment and media industry, as well as the intense competition for consumer attention, there are plenty of growth opportunities for companies to capitalise on in the new media sector."

According to the report, it is digital spend that will drive growth in the sector, a development that will be facilitated by falling bandwidth costs. Indeed, it has already been established that Africa's video-game market has benefited hugely from improved internet access and faster connections.

The report also singled out the South African video-game market as performing particularly well, predicting that the revenue from this sector will grow at an annual rate of 5.6%, reaching R3.7 billion in 2020. While by international standards, this may be small – the US industry, for example, is worth about $30 billion a year – many attendees at the Electronic and Gaming Expo were confident as to the scope for future growth and the genuine interest on the part of many consumers, with advances in mobile technology likely to continue to drive the market.

Acknowledging the importance of mobile, Hall said: "The bulk of South Africa's market value is derived from the mobile sector, with consoles being the second-most popular device type, followed by PCs."

Photo: Skadonk Showdown: Taxi terror Johannesburg-style.
Skadonk Showdown: Taxi terror Johannesburg-style.
Photo: Skadonk Showdown: Taxi terror Johannesburg-style.
Skadonk Showdown: Taxi terror Johannesburg-style.
Photo: Broforce: A South African run-and-gun hit.
Broforce: A South African run-and-gun hit.
Photo: Broforce: A South African run-and-gun hit.
Broforce: A South African run-and-gun hit.

After South Africa, Nigeria's gaming market is also seen as growing rapidly. Primarily, this has been driven by strong social/casual game revenue, which is expected to exceed $150 million by 2020.

The star performer, though, is Kenya, which is expected to become the world's fastest-growing video-game market over the next four years. Its predicted 13.4% average annual growth is expected to be derived primarily from online/microtransaction revenues.

One bar to further growth, however, is the high cost of gaming entertainment, with many consoles and high-performance PCs well outside the financial reach of typical African consumers. At about $80, even the cost of many games is well beyond the means of the majority of would-be purchasers.

Spelling out the implications of this, Hall said: "Consequently, as broadband internet becomes more pervasive and the cost of data drops, I'd expect PCs to experience an increase in growth, possibly even eclipsing consoles as the future gaming platform due to their lower associated costs."

PwC's analysis, perhaps a little unsurprisingly, also highlights the almost perfect correlation between the relative size of any country's under-35 population and its growth in entertainment and media spending. This clearly underlines the accepted wisdom that younger consumers are the primary drivers of growth in this particular sector.

Citing his own company's research, Hall said: "We conducted our own survey, which indicated that the average gamer in South Africa is black, aged between 25 and 49 and from a lower-income group. Perhaps more surprisingly, interest is equally strong on the part of both males and females."

Table: Sub-Saharan Gaming Markets (2016-2020)
Table: Sub-Saharan Gaming Markets (2016-2020)

Competitive Gaming

In addition to online gaming, large sections of the expo were given over to competitive gaming tournaments. Sports and combat games, in particular have become a big pull for competitive gamers throughout the South African gaming community, with e-sports tournaments attracting huge numbers of participants and viewers.

In global terms, it is estimated that e-sports now pull in audiences of more than 380 million, with much of this driven by the huge popularity of a relatively small number of games, most notably FIFA. On the combat games front, the current big draws are Defense of the Ancients 2 (Dota 2) and Counter-Strike: Global Offensive. Among the companies doing well on the back of this are VS Gaming, Orena, Mettlestate, Mega8 and Kwezi.

In South Africa, in particular, this is a trend to watch. Competitive gaming has already proved to be hugely financially rewarding, with participants tempted by the large cash prizes offered by a number of the country's gaming tournaments, with Johannesburg's Rage being probably the most well-known. According to the PwC report, such tournaments, as well as games such as Dota 2, have played a key role in driving revenue in South Africa's online PC games sector.

Frances Lombard is South Africa Country Products Manager for Asus, a Taiwanese technology brand that makes components for the extreme gaming computers favoured by competitive gamers. Assessing the significance of the sector, he said: "It's a crazy market and our customers are becoming ever more aspirational. They are forever in search of higher-performance technology. With the competitive gaming environment becoming more mainstream in South Africa, they are constantly looking to outperform their opponents."

In other areas, games-inspired costumes and memorabilia – known collectively as 'cosplay' and favoured by gaming fanatics across the world – is a relative new arrival to South Africa, but one clearly set to become significant. Explaining its appeal, Samantha Metcalfe, the Proprietor of Infinite Bunny, a Cape Town-based supplier of cosplay outfits and 3-D printed props, said: "Cosplay really helps aficionados get into the zone by dressing up as their favourite game characters."

Despite the focus on the latest e-gaming technology, many attendees at the Electronic and Gaming Expo had no doubt that traditional offline favourites, such as Monopoly, Cluedo and Risk, remained as popular as ever, while a number of the more recent entrants to the board-game scene – notably The World of Harry Potter and Warhammer – only served to confirm the sector's abiding appeal. In something of a reverse twist, a number of traditionally unplugged games were seen as having learned a lesson or two from their digital counterparts.

The prime example here, of course, is Lego, with the digital incarnation of the Danish building bricks having proved a true phenomenon. Impressively, Lego has translated the educational values of its massive international brand into a range of e-games, all designed to appeal to younger age groups.

Despite this, many of the true enthusiasts of table-top games maintain they offer an element of human interaction often missing from video games. As with their electronic-gaming counterparts, however, competitions among communities of fans are now starting to become ever more popular, though the prize money is somewhat lacking by comparison.

Overall, the future success of gaming in South Africa looks to be more in the digital sphere, with mobile devices set to increasingly drive the sector. Sanguine about future prospects, Hall said: "Although mobile gaming will continue to grow, I don't expect VR to take off in South Africa, largely because of the high associated costs.

"PC gaming, however, will continue to grow and may, eventually, overtake the console sector, especially if the pricing of games is not adjusted to reflect the realities of the local economy."

Photo: The Electronic and Gaming Expo: Harbinger of sector set for multi-million dollar growth across Africa.
The Electronic and Gaming Expo: Harbinger of sector set for multi-million dollar growth across Africa.
Photo: The Electronic and Gaming Expo: Harbinger of sector set for multi-million dollar growth across Africa.
The Electronic and Gaming Expo: Harbinger of sector set for multi-million dollar growth across Africa.

The Electronic and Gaming Expo 2017 took place from 27-29 July at the Cape Town International Convention Centre.

Mark Ronan, Special Correspondent, Cape Town

Content provided by Picture: HKTDC Research
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