Emerging technologies driving growth of gaming in Africa (1)
TECHNOLOGICAL DISRUPTION is transforming markets and societies across Africa in ways that wouldn’t have been possible even five years ago. What marks out the digital revolution in Africa isn’t the technology that underpins it, so much as the growing affordability, accessibility and until recently, largely untapped demand that have made its advances so rapid. Global foreign direct investment is down, but not in Africa especially in the area of emerging technology.
United Nations Conference on Trade and Development reveals that $46 billion worth of Foreign Direct Investment (FDI) flowed into sub-Saharan Africa in 2018, an 11 percent increase compared to 2017. This is significant for the continent because when a company makes an FDI, it’s expected that it will not only invest money but will also invest soft assets, e.g. technology, expertise and training. Egypt ranks highest in attracting FDI in Africa followed by South Africa, Morocco, Nigeria and Kenya with East Africa being the top investment destination in the African region.
The gaming industry in Africa has been one of the greatest beneficiaries of technology advancement. With a combined gaming industry worth $38 billion, according to Venture Africa as at 2018, the continent is touted to be the next frontier in gaming. 5G is the future of mobile communication but only two countries on the continent have rolled out the broadband, South Africa and Lesotho. Nigeria is the next destination for 5G in Africa; this was revealed by MTN, the mobile telecommunication giant, at the launch of its 5G network in Bloemfountein and Port Elizabeth in South Africa in June this year.
Most countries on the continent are now on 4G. Initial development had been slow due to delays in assigning spectrum to service providers. However, in the last four years, things have changed and the pace of development has increased. Achieving broadband access for all in Africa comes with a $100 billion price tag with Africa Union, ably supported by the World Bank Group, setting 2030 to connect every individual, business and government.
South Africa dominates the gaming industry in sub-Saharan Africa. PwC, a top accounting and auditing firm, puts the country’s total gaming turnover at $18.77 billion of which 82 percent come from the 37 casinos in the country. One of the key influential factors contributing to the gaming market’s remarkable continued growth pattern is the rise in mobile gaming. Within this sector, two main niches, in particular are on the rise; esports and iGaming. Mobile gaming’s rise has been made possible largely due to successful internal government investmens plans into the country’s infrastructure.
One niche mobile gaming market making a huge leap forward by swallowing up available markets share rise is the iGaming industry where slots, card games and sports betting are very popular. There is an army of online casinos targeting South African players with enticing welcome bonus deals that often double the first deposit. The South African market is part of a global Esports industry which was receiving increased attention from broadcasters, sponsors and advertisers even before the global coronavirus pandemic forced billions of house-bound citizens to seek new forms of entertainment.
Africa’s growing young population and uptake of internet and smartphone technology has led some industry players to cast their eye towards the continent. Therefore, with a youthful and increasing urban population in Africa, there’s an opportunity to invest in the dynamic Esports ecosystem and capitalize on a growing entertainment phenomenon within this emerging market. As the audience grows, more businesses are expected to invest in African team talent, with South African and Egyptian gamers already starting to feature on international rosters.
In March, Nodwin Gaming, an Indian licensor and creator of esports properties that provides media rights for live events and programming, announced its expansion into South Africa with the opening of a new office. The firm has also invested in Nigeria and Kenya. Statista, a research company posits that the South African video games market will grow to R5.44billion ($292m) in 2023 and this boom has created a new class of celebrity athletes capable of endorsing products to a young, virile and wealthy demography.