In-game Purchases Jump In SA
  • In-game Purchases Jump In SA

    Admin 0 0 47 Date: 30 Sep 2019
  • South Africa’s video games market has witnessed a strong growth in recent years. From the devices the games are played on, to the number of gamers themselves, the video gaming culture has considerably changed, while online and digital revenues rise.

    New trends

    The year 2017 marked a turning point in the global video games market, as revenue from the social gaming sector (R1.6 billion) overtook revenue from the traditional sector (R1.4 billion). In other words, more-accessible social gaming overtook the PC and console sector.

    South Africa showed the same trend, as a result of the growth in smartphone ownership, which provides millions of consumers with an accessible and affordable door into the gaming market.

    According to the Entertainment and Media Outlook 2018-2022, the total PC games revenue in South Africa in 2017 accounted only for the 46 % of the total video games revenue, while the social gaming revenue accounted for the 52%.

    Traditional gaming revenue in South Africa is still the largest in Africa, but growth will be limited because of the cost of hardware and software.

    In contrast, games playable on smartphones typically offer a zero-cost point of entry, which means that most consumers have little or no difficulty taking part in the social gaming market.

    Consequently, social gaming is surpassing the growth of traditional gaming thanks to the advantages it provides. Social games are free, widely available and require only a few minutes at a time to play and they tend to grow virally because user can invite their contacts to join them in playing the game.

    New games

    It is expected that revenue per smartphone gaming will only continue to rise. In 2017 the country’s casual gaming market was dominated by simple and compelling games like strategy title Clash of Clans and the worldwide famous puzzle game Candy Crush Saga.

    In 2018 these well-established games were challenged by the tremendously popular range of “battle royale” games such as Fortnite and Apex, which are mainly shooters in which players land on a shared map with several enemy players and must fight until only one player or group remains. These games owe their popularity to their huge player bases on PC and console, which coupled with smartphone players; made them South Africa’s most played games in 2018.

    Better internet infrastructure

    Another factor that plays an important role in the expansion of the gaming market in South Africa is the improved internet infrastructure. It makes it more than sufficient to support gaming and with Fibre being almost fully integrated only in cities and wealthy suburban areas. In fact, the increasing access to high-speed internet connection has allowed more users to play online multiplayer games and has provided them with access to additional content for the games they purchase.

    Some 2.4 million households have fixed broadband, an amount which is relatively low due to limited network coverage high overall tarifs. In contrast, the number of South African mobile internet subscribers in 2019 reached 38 million and that number is expected to grow up to 40.8 million next year.

    More revenues and more digital sales

    Gaming is moving towards digital revenues because consumers are opting for microtransactions with in-game purchases such as character skins or even powers and abilities. In-game purchases take place both in console games and PC. To illustrate, the revenue of online microtransactions in console games was around R92 million in 2018 and it was around R293 millions for PC games, according to the Entertainment and Media Outlook.

    Microtransactions allow gamers to control the amount they spend on games rather than paying a monthly subscription fee. Subscription models work well with the most popular games, while the free-to-play business model, characteristic of the above-mentioned “battle royale” games, attracts smaller games to help them build interest.

    As a result of all these factors, the number of online microtransactions in SA has increased by 13 % from 2018 to 2019, according to the online service platform QuotesAdvisor.com. As more and more gamers have access to the gaming market, the digital sales both of video games and in-game content have received a tremendous boost, the online service platform explained.

    A shift from physical to digital video games

    The shift from physical to digital for the video game market has been slow but inevitable and it has accelerated in the last two years. However, unit sales vary depending on the video game, as physical copies of PlayStation 4, Xbox One and PC games are still in high demand.

    Popular physical PC games in South Africa including the Sims 4, Farming Simulator, the Call of Duty franchise, and World of Warcraft. When it comes to PlayStation 4 and Xbox One titles, South African bestsellers include FIFA 19, Red Dead Redemption 2, Grand Theft Auto V, and Far Cry New Dawn.

    The video gaming market is also growing in South Africa thanks to companies such as Game 4U, a leading gaming retailer specializing in Xbox and PlayStation games. Gaming enthusiasts, especially those who are fanatics of physical video games, can have access to the latest and most popular video games.

    It is important to highlight that almost every game for both PC and consoles include downloadable content, which also accounts for the increase in online sales.

    Competitive gaming leagues

    There has also been a large increase in competitive gaming leagues further displaying how the gaming culture has grown in South Africa. Even though the industry is comparatively smaller than the rest of the world, it is starting to gather pace: South African esports stars earned a total of R3.78 million in 2018.

    Competitive gaming leagues operate on the same level as local sport teams and leagues with organised tournaments and competitions, where competitions against other countries are organized.

    Online games platforms enable players to download games and in-game content to compete against other players across the Internet. The PC platforms as well as consoles support an online environment which is thriving in South Africa and it is only set to continue to do so. That is why digital distribution of content is emerging as an important segment of the online gaming market in South Africa.





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