PC gaming dying in South Africa?

PwC recently released its 2014 – 2018 entertainment and media outlook report for South Africa, with a particular focus on the country’s gaming industry.

According to the report, the SA video game market was worth R2.4 billion in 2013, up from R1.6 billion in 2009.

A large chunk of this growth can be attributed to mobile gaming, which is expected to help grow the local market to R3.7 billion by 2018.

“Video games in South Africa are seeing healthy growth and South African gamers are keen to learn more about upcoming games and technology. NAG magazine’s annual rAge expo catered to more 32,000 gamers in 2013 with over 2,100 bringing their own PCs for a 52-hour local area network (LAN) party,” said the report.

PC Gaming numbers

PC gaming in the country, however, is set to decline over the next four years, according to the research.

PC game revenue in SA is expected to drop from R402 million – its peak in 2012 – to R360 million by 2018. The reason for the decline, according to PwC, is that more people are playing “casual games” on their PCs via Facebook, combined with the continued prevalence of piracy in the industry.

Steam and EA’s Origin are not letting the PC game market fall without a fight, though, and there has been a growth in digitally purchased PC games in SA.

It is forecast that, by 2018, digital game purchases through platforms like Steam will make up 53% of all PC game revenue – finally surpassing physical game sales.

This still falls short of the expected global average of 85%, though.

PC Gaming Master Race

Online Gaming

The report also touched on the state of online gaming in SA, which is growing significantly – albeit from a small base – and is expected to continue this upward trend.

“Online gaming spend will be the second fastest-growing segment at 12.5% annually, growing from R161 million in 2013 to an estimated R291 million in 2018,” said PwC.

The reason for the “small base” was attributed to SA’s “immature broadband market”. PwC expects the number of citizens who have access to broadband to increase from 2013’s 1.4 million to 2.1 million by 2018.

Leading the charge in the growth of online play are Guild Wars 2, The Elder Scrolls Online, and EVE Online.

Elder Scrolls Online

Consoles and Second-hand Games

The second-hand games market in SA is one of the smallest in the world, according to PwC, and is expected to stay static, or even decrease in the future.

New consoles – PS4, Xbox One – are expected to offset this somewhat, but the “small installed base” in SA and the relative lack of next-gen games means this will take a few years to be felt.

A barrier to entry for the Xbox One and PS4 in SA is the relatively expensive price of the consoles. In the U.S., for example, buying a PS4 represents a significantly smaller investment when compared to what we have to pay locally, and this drives people to hang onto their PS3s and Xbox 360s.

One part of the report, which did seem questionable, was its claim that HD capable consoles and games are not a strong seller in SA due to the fact many “South African gamers will be still be using older standard definition TVs”.

Maybe I need to check my privilege, but surely a 32-inch HD LCD is standard in most gamers’ homes?

SA’s lack of broadband access was touched on again by PwC, which said the lack of connectivity motivated for the retention of the the last-gen consoles as they were not as reliant on high-speed Internet connections as their successors.

PwC predicts that by 2018, 27% of console games will be downloaded digitally in SA, compared to the expected global average 37%.

The physical game sales market fell slightly in 2012 and 2013, according to the report.

PlayStation 4

Mobile Gaming

Mobile gaming continues to grow in SA, with games like Candy Crush Saga – which has been downloaded 500 million times world wide – still finding its way onto smartphones and tablets.

Despite this popularity, monetizing social and casual games can prove difficult, said PwC.

Mobile game spending is expected to grow from R858 million in 2013 to R1.5 billion in 2018. (Can’t be that difficult to monetize, it would seem.)