Africa’s Gaming Market Defies Global Slowdown, Aiming to Surpass $1 Billion in 2024.
Africa’s video gaming market is experiencing a significant surge, defying the global slowdown. Exclusive data shared by Dutch research firm Newzoo and African gaming startup Carry1st indicates that Sub-Saharan Africa’s gaming industry is poised to surpass $1 billion in revenue for the first time in 2024.
This robust market performance is noteworthy, given the sluggish economic growth in the region, characterized by persistent inflation, challenging financial conditions, and high net debt.
Despite a dip in Sub-Saharan Africa’s economic growth rate from 4.1% in 2021 to 3.6% in 2022, as reported by the World Bank, the video game market in Africa witnessed an impressive 8.7% year-over-year revenue increase, generating $862.8 million in 2022, according to Newzoo’s data.
Africa’s video game market stands out as a remarkable exception amidst the global contraction in gaming activity. While the rest of the world experiences a decline in revenue due to the waning impact of Covid lockdowns and increased cost of living, Africa’s gaming industry continues to flourish.
According to Newzoo, the global games market generated $182.9 billion in revenue in 2022, marking a 5.1% decrease compared to 2021. In contrast, Sub-Saharan Africa’s gaming market demonstrates resilient growth, with revenue expected to surpass $1 billion in 2024.
Cordel Robbin-Coker, CEO of Carry1st, headquartered in Cape Town, emphasizes the significance of this data, particularly the sustained secular growth observed in Africa’s games market.
While acknowledging that Covid played a significant role in driving growth, Robbin-Coker notes that as the pandemic’s effects diminish, other markets are experiencing slowing or declining growth.
This divergence highlights Africa’s unique position and potential within the gaming industry, defying global trends and offering promising opportunities for further development and investment.
The exponential growth of Africa’s gaming market can be attributed to several critical factors, including its rapidly expanding population and increasing internet penetration.
With Africa having the fastest-growing population globally, many individuals are gaining access to the internet for the first time, primarily through mobile phones. Over 90% of this online growth in Africa is driven by mobile devices, indicating a strong demand for digital content.
Venture capital firm Konvoy, specializing in gaming-related investments, predicts a robust growth rate of 15.7% in Africa’s gaming industry for 2023, followed by 13.6% in the subsequent year. These projections surpass earlier estimates of 9.23% and 8.95% growth, respectively.
Long-term trends, such as population growth, increased internet connectivity, and the widespread adoption of smartphones, drive a positive outlook.
The rise of smartphones has played a significant role in boosting Africa’s gaming prospects. With a higher-than-average young population in the region, digital technology has been embraced enthusiastically.
According to GSMA, a mobile industry body, it is estimated that by 2030, 87% of the sub-Saharan African population will own a smartphone, compared to 51% in 2022. This indicates a substantial increase in smartphone ownership, creating a fertile ground for further growth in the gaming market across the continent.
In summary, Africa’s gaming industry is poised for incredible growth, driven by population expansion, increasing internet access, and the widespread adoption of smartphones.
These trends indicate a promising future for the gaming market in Africa, attracting investments and paving the way for further development and innovation in the industry. The rapid growth of Africa’s gaming market can be attributed, in part, to falling smartphone prices and the rise of “digital-native” users.
While the global gaming industry is expected to see modest growth of 3.3% in 2023, driven by a rebound in mobile gaming, it pales in comparison to the exceptional growth witnessed during the height of the COVID-19 pandemic in 2020 and 2021, when people spent more time at home.
The mobile gaming segment has been a significant driver of growth in Africa. Newzoo said mobile gaming generated $778.6 million in revenue in 2022, accounting for approximately 90% of total game sales.
Among African nations, Nigeria emerged as the leader in annual gaming revenue, attracting $249 million, followed closely by South Africa with $236 million in revenue. South Africa had previously held the title of Africa’s most prominent video gaming market.
Other notable revenue-generating countries include Kenya ($46 million), Ethiopia ($42 million), and Ghana ($34 million).
Ethiopia experienced the highest year-over-year growth rate at 13%, while Uganda saw the slowest growth, increasing only by 6% in the games market. Nigeria and South Africa contributed twice the revenue of the other top eight countries combined, indicating their dominant positions in the African gaming landscape.
Notably, all ten countries showcased year-over-year sales growth.
The affordability of smartphones and the growing population of digitally savvy users have played a significant role in driving Africa’s gaming market.
As smartphone prices continue to decrease, more individuals have access to gaming platforms, contributing to the industry’s robust expansion across the continent.
