• Sofia

How South Africa can grow its gaming industry

In 2018, the global gaming industry consisted of 2.3 billion consumers, who spent nearly US$ 138 billion on games. Research done two years ago showed that there were more than 11m gamers in South Africa.

A recent PricewaterhouseCoopers (PwC) report showed that spending on gaming in South Africa in 2017 was R3,060m. While this is only 2.37% of total South African entertainment and media spending in that year, the video games sector had the fastest year-on-year growth rate (16.8%) in 2017 of any of the media and entertainment sectors in South Africa. It includes sectors like books, magazines, cinema, music and podcasts.

The growth is partly because of the rise of mobile gaming via smartphones which has meant that many more South Africans can afford to play. Schools and higher education institutions are increasingly offering competitive online gaming activities, referred to as “eSports”, which are watched by spectators. This too is driving the popularity of online gaming.

The PwC report identifies the digital video games sector as one of “the biggest success stories” in South Africa’s entertainment and media industries.

To understand the size, international growth potential of the local market, and to identify challenges and opportunities, the Department of Arts and Culture commissioned the South African Cultural Observatory to produce a study of the sector.

The Observatory is a research hub funded by the Department of Arts and Culture. Based at Nelson Mandela University, partners include Rhodes University, the University of Fort Hare and the University of KwaZulu-Natal. Its purpose is to provide policy relevant research on the cultural and creative industries. It also provides capacity building resources and information to cultural sector practitioners.

The size of the South African animation and gaming sector is comparatively small. Yet, the international rise in demand for their content, and the growing quality and recognition of South African products, shows that the sector is maturing. It could play an increasingly important role in driving innovation and growth.

Not only entertainment

Gaming is not just about entertainment. For example, the Serious About Games (SAG) movement in South Africa promotes online gaming for educational purposes and social change. Serious games look like video games, but their purpose goes beyond that.

Online games are also being used to test and develop artificial intelligence (AI) programs that could be put to more serious uses in the future. OpenAI is a non-profit AI research organisation. Its aim is to promote and develop friendly AI that benefits humanity. It also supports technologies driving the Fourth Industrial Revolution – technologies like artificial intelligence, robotics, virtual reality and the internet that are driving major changes in the world.

To establish the size of the South African market we undertook a comprehensive online search for South African gaming and animation companies. We also sent out an online survey to collect information on the business environment and industry perceptions of the challenges and opportunities faced by the sector.

We identified 59 gaming, or gaming and animation (hybrid), companies in South Africa. Nearly half (48%) are based in the Western Cape. The most commonly used gaming release platform is still a PC.

In the future this, combined with high data costs, could be a constraining factor given the international shift to mobile platforms.

What we found

There is a considerable overlap between gaming and animation, with 46% of companies producing games also doing animation work. Most of the gaming and animation companies (65%) in the database were founded in the last 10 years. 57% of gaming companies are “very small”, with annual turnover of less than R2-million.

Turnover data was provided via an online survey. It is estimated that the turnover for the gaming and animation industry (that is, companies based in South Africa who develop video games or offer animation services) in the 2017/2018 financial year was R476m

Taken from http://techfinancials.co.za

2 views0 comments

Subscribe to Our Newsletter

  • White YouTube Icon
  • White Facebook Icon
  • White Instagram Icon

© 2023 by LuZibo. Proudly created with Wix.com