The South African gaming market is headed for massive trouble

gaming industry

Gaming in South Africa has become very expensive lately, with the high cost of the Rand causing prices of AAA games to surge towards and past the R1,000 price point on both PC and Console.

However, the primary cause for concern is the low adoption rates of the PlayStation 4 and Xbox One.

This happened with the previous generation of consoles too, and it does make selling newer games harder.

It’s not all console-related either. While we all love digital platforms like Steam, they have eaten into the South African retail market in a big way.

With the impending arrival of the PlayStation Neo and Xbox Scorpio and the prevalence of online console sales, it doesn’t look like the retail market for games will catch a break any time soon.

We spoke to several well-known retailers in South Africa about how serious these problems actually are and who is being hit hardest:


Neil Smith (Raru)

Raru-logo

It might be true in the broader overall market in SA, that the Xbox 360 and PS3 games sell more than on PS4 & Xbox One.

The same thing happened years ago when the PS3 was first released. For a number of years afterwards, the suppliers still did better sales on PS2 software than on PS3 software sales.

For us though, the reverse is true. PlayStation 4 has accounted for the bulk of our game sales, with Xbox One & PC more or less evenly split.

Xbox 360 and PS3 are right at the bottom of the pack, below 3DS and Wii U sales.

The reasons for this is probably because we have quite a strong focus on new releases and pre-order titles.

This year though, the game prices did escalate badly when the Rand became very weak. This has resulted in some of the new games releases for 2016 getting priced at a much higher price point than anybody would like to see.

The higher game prices have made buyers more cautious as to which titles they spend their hard earned cash on, and also forces consumers to look around more for places where they can get the best value deals.

The really popular titles will still do well, like Battlefield 1, Final Fantasy XV and Pokémon Moon / Sun.

With the Rand strengthening, we are starting to see game prices starting to come down again. Hopefully this positive trend will continue in 2017.


Tex Hartog (AnimeWorx)

Awx

A gaming purchase as a luxury item is about expendable income and that is something that is currently lacking in most SA households with the recent economic concerns.

As a specialist independent retailer we cater to a more dedicated gaming consumer that has already migrated over to PS4 and Xbox One.

But the obvious factors to consider are the retail price points that have fluctuated with exchange rates that often place new release pricing out of range for your casual gaming consumer forcing them to be extremely selective with their purchases, and the lower pricing on digital distribution platforms which would affect the retail viability of the physical version, forcing the retailer to be selective on the products they stock.

At the end of the day it’s about sustainable price point on both the software and hardware.


Makro

Makro logo

Makro is seemingly bucking the trend, as we have seen an uptake in console sales, particularly in promotional periods such as our current BIG Birthday Bash.

Currently the PS4 is doing very well in our business and we have seen a very good uptake in its associated accessories and software.

PS3 has slowed down and it is anticipated that there will be very little PS3’s in the country towards the end of this year.

Xbox 360 is still showing strong numbers, with Xbox One not growing at the rate of the PS4.

This trend is expected to carry on for the rest of the year until better pricing on both Xbox One and PS4 can be achieved.

There is still a market for both old and next generation gaming consoles in South Africa, with first-time gamers generally investing in the old generation consoles.


Have you migrated to the newer platforms? Are you spending less on games? Let us know in the comments below and in our forums.

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