Even though South Africa’s eSports industry has its fair share of challenges, the potential for growth in the coming years is still huge.
This is because the global eSports industry has been experiencing a steady uptick in market growth since 2020.
According to Newzoo’s 2021 Global Esports and Live Streaming Market Report, the global eSports audience will pass the 500 million mark in 2022 and will continue to grow to an estimated 577.2 million people in 2024.
This growing audience leads to more engagement, which in turn leads to higher revenues – by the end of 2021, global eSports revenues reached $1.1 billion (R16.5 billion) and are expected to climb to $1.6 billion (R24 billion) by 2024.
Since over three-quarters of the eSports industry’s total market revenue is generated from media rights and sponsorships, it’s easy to see why some of South Africa’s major telecommunications providers, like Telkom and Vodacom, have invested significantly in the eSports industry.
Telkom, for instance, spent approximately R150 million in 2017 to grow the South African eSports market and make it profitable with its company VS Gaming.
However, the global pandemic and other factors still hold back the local eSports industry.
Challenges facing the industry
Some of the biggest challenges to South African eSports include limited access to good internet infrastructure, exorbitant data costs, the high costs of gaming equipment, and load shedding.
Additionally, a lack of local servers means South African gamers often have to deal with high-latency gameplay, making it difficult to compete at the skill level that international eSports demand.
These difficulties mean that South African player numbers of popular eSport titles are low compared to international numbers, leading to a lack of local servers since game publishers often only build these servers when the number of players necessitates it.
These factors, combined with the global pandemic, have stunted the local eSports industry’s growth.
The future of the industry
Even considering the industry’s challenges and obstacles, the country still has the largest eSports community in Africa.
This is reflected by the fact that multiple schools and colleges have started to include gaming and eSports-related programs in their curriculums, like the Curro Clash Minecraft Esports League.
Additionally, thanks to ongoing projects like 2Africa and SpaceX’s Starlink, South African eSports still have a chance to break into the international market and see massive growth in profitability.
2Africa is a massive subsea cable project that will connect South Africa (and several other African countries) to Europe and the Middle East to provide cost-effective, low-latency internet connectivity.
This, coupled with the arrival of SpaceX’s Starlink in 2023, will provide reliable internet connections to those in rural areas, substantially improving the local eSports sector’s profit and growth potential.
Starlink will increase internet access across South Africa.
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