MAIDSTONE, ENGLAND - APRIL 13: Ryan 'Task Azi' De Oliveira Bastos of South Africa and Shiaan 'Shiaan1201' Rugbeer of South Africa warm up prior to their match during Day 1 of FIFA eNations Cup 2019 on April 13, 2019 in Maidstone, England. (Photo by Dan Mullan - FIFA/FIFA via Getty Images)
Video gaming has evolved into a multi-billion-dollar global industry driven by faster processors, improving graphics and increased gaming experiences.
The global video game revenue in 2023 grew by 0.5% year-on-year to $183.9 billion, according to Newzoo.
The US ($46.7 billion) and China ($44.6 billion) were the largest markets, accounting for 50% of total video game sector spend.
In 2022, Africa’s video gaming industry revenue was estimated at $863 million with Newzoo projecting revenue to surpass $1 billion in 2024, accounting for 0.5% of global video gaming revenue. South Africa ($236 million) and Nigeria ($249 million) accounted for more than 50% of the continent’s sector revenue aided by strong market penetration. This is mostly attributed to improving internet penetration, accessibility of smartphones (mobile gaming accounted for more than 85% of revenue) and growing youth population playing games.
Globally PC games (up 5.2%) and console games (up 1.9%) were the only segments that grew and accounted for 50% of video gaming revenue. This was due to sales for games such as FIFA23 (before the end of EA sports and Fifa licencing agreement on September 2023), selling more than 23 million units and contributing significantly to the $7.6 billion earned by EA Sports, and new releases for Final Fantasy XVI (released June 2023), Spider-Man 2 (released October 2023) and EA Sports FC 24 (released September 2023 and previously FIFA).
Sony’s PlayStation 5 sold the most consoles (22.5 million consoles) and grew 65% from 2022, followed by Nintendo Switch with 16.4 million consoles (down 18%) and Xbox Series X/S with 7.6 million (down 15%).
South Africa’s video game industry
South Africa’s gaming industry revenue increased 52% to R7.3 billion in 2023. The country’s gaming industry is expected to continue to grow, driven by increasing smartphone penetration (79% in 2024) and a growing youth population with a keen gaming interest — 47% of gamers are aged 14 to 28 years. The industry encompasses console gaming, PC gaming, mobile gaming, and esports (electronic sports) with mobile gaming accounting for most of its revenue (91%). PC gaming (5%) and console gaming at (4%) rank second and third, respectively. Popular PC and console games include Call of duty, Fortnite, FIFA, Roblox and Grand Theft Auto. The country has 26.5 million gamers, 85% of which are mobile gamers and 15% console and PC gamers.
Video gaming equipment, ranging from high-performance PCs and consoles to peripherals such as controllers, headsets and gaming chairs, are essential for the gaming industry. In 2023, South Africa imported electronics (including smartphones, PCs, video game equipment and electronics accessories such as headsets) valued at R51 billion. Of this stock, video game equipment imports increased the most, appreciating 59% to R1.1 billion in 2023. Key imported equipment included Microsoft’s Xbox, Sony’s PlayStation, and PC gaming equipment. Based on a larger game catalogue, Sony (PlayStation) accounted for 66% of the country’s game console market share, followed by Xbox at 21%.
Opportunities for South Africa
To capitalise on the growing gaming industry, South Africa can focus on several strategic areas to progress its industry. These include:
The Esports industry: Esports is a form of competition using video games, typically organised as multiplayer contests between professional players, either individually or in teams. According to Esports Earnings, South Africa is ranked number 62 in global esport gaming. The country’s esport earnings increased 64%, from $14.3 million (R258 million) in 2020 to $23.4 million (R422 million) in 2023 and is projected to reach $33.6 million (R605 million) in 2028. South Africa has an estimated 12 million esports followers, which includes esports betting, merchandise ticketing and streaming.
By investing in esports infrastructure, including arenas, training facilities, and tournaments, South Africa can attract and host international events and talent, positioning itself as a key player in the global esports arena. Partnerships with global esports organisations can boost visibility and opportunities such as hosting major tournaments and securing sponsorship deals, resulting in the establishment of South Africa as a premier destination for esports events and investments.
According to esport Africa, South Africa is a key destination for continental esport tournaments, buoyed by stable internet infrastructure, particularly in the Western Cape and Gauteng. Current esport organisations in South Africa include Goliath Gaming, Bravado Gaming and ATK. Goliath gaming has gamers that have represented South Africa in global gaming tournaments such as the 2021 and 2023 Fifa eNations Cup in London and 2021 Fifa eWorld Cup Global series the playoffs in Amsterdam.
Local game development: Encouraging the growth and progression of the local game development industry can lead to the creation of unique, culturally relevant games that can appeal to both local and international audiences. Supporting beginner developers through grants, incubators and mentorship programmes is a critical starting point. Notable games created in South Africa include Football Genius: The Ultimate Quiz, Desktop Dungeons and Beautiful Desolation. Building on these successes could contribute to the sector increasing both local and international earnings.
Digital distribution platforms: Developing digital distribution platforms for games can ensure wider reach and accessibility. Collaborating with global platforms such as Steam, PlayStation Network, and Xbox Live can contribute to increased availability of South African-developed games to a global audience. As an example, Brazil is one developing region that has grown its digital distribution platforms for gaming that South Africa could learn from. Brazil’s game sales through digital platforms increased from 54% in 2021 to 62% in 2022. PC games generated the highest revenue at 44%, followed by mobile games at 23% and console games at 12%. In terms of Brazilian developed games, the country has produced a total of 2,600, with more than 1,000 of them being released in 2022 (a 12% rise versus 2021).
South Africa’s gaming industry has the potential to grow and should be taken seriously in terms of its future contributions including employment (such as game development, esports), tourism (esports event hosting) and innovation. Brazil’s successes should be further explored to support how these outcomes can be projected onto the growing local industry.
Sipho Ngwenya is an intern at Birguid.