- According to data from research firm Newzoo, shared exclusively with CNBC, the gaming industry in sub-Saharan Africa is expected to surpass $1 billion for the first time in 2024.
- According to data from Newzoo, games sold in the region generated $862.8 million in revenue in 2022, up 8.7% year-on-year.
- This contrasts with a broader decline as the global gaming market declines 4.3% to $182.9 billion in 2022.
Africa’s video game market is doing well. According to data from Newzoo, games sold in the region generated $862.8 million in revenue in 2022, up 8.7% year-on-year.
Rodger Bosch | Afp | Getty Images
The African video game market is having a moment.
According to data shared exclusively with CNBC, the gaming industry in sub-Saharan Africa is expected to surpass $1 billion for the first time in 2024.
The figures, compiled by Dutch research firm Newzoo for African gaming startup Carry1st, point to a buoyant gaming market in Africa, where economic growth has been sluggish as the region grapples with persistent inflation, difficult financial conditions and high net debt .
According to the World Bank, the economic growth rate in sub-Saharan Africa fell from 4.1% in 2021 to 3.6% in 2022. And it is projected to fall further to 3.1% in 2023.
Despite this, the African video game market is doing well. According to data from Newzoo, games sold in the region generated $862.8 million in revenue in 2022, up 8.7% year-on-year.
This contrasts with a broader decline in video game activity globally as the tailwinds from Covid lockdowns fade and higher cost of living have forced consumers to tighten their belts.
According to Newzoo, the global gaming market generated revenue of $182.9 billion in 2022, down 5.1% from 2021.
Cordel Robbin-Coker, CEO of Cape Town-headquartered Carry1st, said what was most notable about the data was the “underlying long-term growth of the games market in sub-Saharan Africa”.
“Looking back, we know that Covid was a major contributor to this,” Robbin-Coker said. “But now that those benefits have faded, we’re seeing growth slowing and even declining in other markets.”
“We have the fastest growing population in the world,” he added. “People are going online at a very fast pace for the first time. The majority of this – over 90% – is via mobile phones. The appetite for content is really big.”
Gaming-focused venture capital firm Konvoy expects the African gaming industry to grow by 15.7% in 2023 and 13.6% in the year thereafter, ahead of previous forecasts by 9.23% and 8.95%.
“These early numbers for gaming on the continent are encouraging, but longer-term trends in population growth, internet penetration and smartphone adoption paint a picture of incredible growth for gaming on the continent,” said Jackson Vaughan, managing partner at Konvoy CNBC.
In particular, the introduction of smartphones has boosted Africa’s gaming prospects. A younger than average population in the region means there is strong adoption of digital technology.
According to the GSMA, 87% of the population in sub-Saharan Africa will own a smartphone by 2030, up from 51% in 2022.
This is not least thanks to falling smartphone prices and the growth of “digital native” users.
The global gaming industry is expected to return to growth this year. Analytics firm Ampere Analysis forecasts it will grow 3.3% in 2023 as mobile gaming “returns into some form.”
But it’s a far cry from the rapid growth seen in 2020 and 2021, when the coronavirus pandemic forced people out of their homes and allowed them to spend more time gaming.
“The potential impact on user acquisition from future privacy changes on platforms, as well as a broader audience less resilient to changing macroeconomic conditions, mean that the performance of the mobile games market has become less predictable than in the past,” said Louise Shorthouse , Analyst at Ampere Analysis.
In Africa, much of the growth in gaming has been driven by smartphone use.
According to Newzoo, mobile gaming generated $778.6 million in revenue in 2022, accounting for about 90% of total gaming revenue.
Nigeria leads the way with total annual sales of US$249 million, followed by South Africa with sales of US$236 million.
South Africa was previously Africa’s largest video game market, according to Newzoo.
The second highest revenue-generating countries were Kenya (US$46 million), Ethiopia (US$42 million) and Ghana (US$34 million).
Ethiopia saw the highest year-over-year growth at 13%, while Uganda was the slowest growing games market at just 6% growth.
According to Newzoo, Nigeria and South Africa contributed twice as much revenue as the other top eight countries combined. All ten countries reported year-on-year revenue growth.