SA gaming market growth prediction

Recent statistics from market research company, Gfk highlighted that SA’s gaming market is a R1.72 billion industry. This figure includes hardware, peripherals and physical game sales, but not digital game sales.

Physical game sales in South Africa have now overtaken local box-office ticket sales: in 2011, almost 3.9 million physical games were sold generating over R900 million in revenue, surpassing movie ticket sales, pegged at R788 million.

To get a broader view on the outlook for South Africa’s gaming market segment, we spoke to Arthur Goldstuck, MD of World Wide Worx, a researching, publishing and strategy company which specialises in the South African technology market.

“The take-up of gaming platforms, specifically Nintendo Wii and DS, Microsoft Xbox, and Sony PlayStation, has been greater in the past five years than during any equivalent period in South Africa. This in turn has underpinned a thriving industry in gaming software,” said Goldstuck.

“Quite coincidentally, this growth has come at the same time as the rise of the smartphone, which has become a gaming platform in its own right. Our research has shown that games are one of the three most popular features in use on all phones in South Africa – it has far more take-up than music, for example. Of course, this mostly represents free games, but it is the gateway to paid content,” said Goldstuck.

Highlighting the power of the internet in delivering information and entertainment to South Africans, Goldstuck said: “In effect, the music and movie industries have been missing in action in the digital environment, constrained as they are by archaic regional restrictions that make little sense in global, supposedly seamless Internet.”

“By trying to create seams and borders in an environment where such boundaries are regarded as damage, the industry pushes users to environments where such restrictions are less enthusiastically pursued,” he continued, leading in to a prediction on the growth of the SA gaming market.

“This means that gaming, as an entertainment option, will continue to grow at the expense of movies and music in South Africa.”

Despite the impressive figure of a R1.72 billion SA gaming market, larger markets still overshadow South Africa in this regard. In the United States, gaming generated US$17.02 billion (±R130 billion) last year according to the NPD Group. Movie sales in the US generated US$9.42 billion (±R72 billion) according to The-Numbers.com.

Discussing the relative size of the SA gaming market size, Goldstuck said: “We are a small market, so the gaming market will be small, too. In order to grow such markets, we have to grow access to digital tools, and that has to be, partly, a function of economic growth and education.”

Speaking to a potential future for would-be South African game developers, Goldstuck said: “South Africa is not a very hospitable environment for game development now, and is unlikely to be in the near future.”

“However, it is an environment in which great developers can stand out and gain enormous prominence due to lack of noise in this area,” Goldstuck concluded.

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