Global eSport industry eyes African market

eSports – competitive video gaming tournaments – are enjoying unprecedented growth under lockdown and South Africa could be a staging post for their expansion across the continent. Will McBain reports


eSports – competitive video gaming tournaments – are enjoying unprecedented growth under lockdown and South Africa could be a staging post for their expansion across the continent. Will McBain reports

Johannesburg resident Sam “Tech Girl” Wright kept her passion for video gaming a secret in high school. “It wasn’t cool, you’d just get mocked, and being a girl playing video games was even worse,” she says. 

Wright now travels the world hosting and commentating on eSports events – organised, often broadcasted, and sometimes lucrative video game competitions – and blogs about her local scene. 

The South African market is part of a global eSports industry which was receiving increased attention from broadcasters, sponsors and advertisers even before the global coronavirus pandemic forced billions of house-bound citizens to seek new forms of entertainment.  

Twitch, a live video streaming service owned by Amazon which is frequented by gamers, has increased its users by over 25% since March, while eSports leagues catering to football, war game and fantasy players enjoy unprecedented growth. Footballers, Formula One drivers and entertainers including Trevor Noah compete in broadcasted e­Sports games during the pandemic, helping fill the void left by the absence of traditional sports and giving multiplayer online video games new global exposure.  

“When you’re playing, everyone’s the same. It doesn’t matter if you’re disabled, or what colour your skin is, it doesn’t matter what gender you are. When you’re in that game, you’re on an equal playing field. And I think that’s what makes it really fun, especially at this time,” says Wright.  

Rapidly growing market

The global eSports market is expanding rapidly. NewZoo, a market intelligence firm, predicts global revenues will grow to $1.1bn this year, with total audiences increasing to 495m, a year-on-year growth of 11.7%. Streaming revenue was forecast to hit $18.2m globally, up 33% from 2019, but could now be significantly higher given the pandemic. 

Growth worldwide is underpinned by the vast, tech-savvy markets of China and India. But Africa’s growing young population and uptake of internet and smartphone technology has led some industry players to cast their eye towards the continent. Futuresource estimates annual audience size in the region will grow from 30m in 2020 to 53m by 2023.  

“With a youthful and increasingly urban population in Africa, there’s an opportunity to invest in the dynamic eSports ecosystem, and capitalise on a growing entertainment phenomenon within this emerging market,” says Morris Garrard, an analyst at Futuresource Consulting. 

“As the audience grows, more businesses are expected to invest in African team talent, with South African and Egyptian gamers already starting to feature on international rosters. This opens up sponsorship opportunities for companies investing in these athletes, with advertising targeted to better reach African fans”. 

Gateway to Africa

In March, Nodwin Gaming, an Indian licensor and creator of eSports properties that provides media rights for live events and programming and claims to have engaged over 20m gamers, announced its expansion into South Africa with the opening of a new office. The firm has also invested in Nigeria and Kenya.  

“With South Africa, we are pushing our geographical limits. The expansion is a gateway to not just South Africa but the whole of Africa. Regarding the development of eSports in the region, the scenario right now looks a lot similar to what India was five years ago. The South African audience is a healthy mix of PC and console players alongside the massive mobile gaming populace,” said Sidharth Kedia, Group CEO of Nodwin Gaming, in a press release at the beginning of March. 

Merlin Wiedeking, CEO at Nodwin Gaming International, expects further interest in South Africa as broadband proliferates and data costs come down. The company targets the key 16-30 age group, which appeals to advertisers. 

“Africa’s such a large continent with so many people, and so many opportunities,” says Wiedeking. “Sure there’s economic challenges, but we could never understand why nobody’s trying to come in and do something with the industry, but that’s now what we’re trying to do”. 

Competitive disadvantage

Tournaments are streamed on Facebook, Twitch and YouTube, or sold as media rights to traditional broadcasters, with sponsorship from large multinationals like Coca-Cola and RedBull. Ginx E­sports TV, an international, multi-language TV channel, features on the sub-Saharan satellite platform DStv.

The direction of travel is encouraging for the industry, but rights packages remain small compared to traditional sports. Those grinding away behind the scenes caution that revenue streams are in their infancy.  

Furthermore, slow broadband speeds, the high cost of data and the relatively expensive cost of consoles and games stand as significant barriers to growth on the continent, particularly outside South Africa. The speed between a player’s computer or mobile device and the game server can prove crucial in tight contests, hampering the ability of African gamers to compete on a level playing field with international rivals.

This competitive disadvantage forces African gaming talent like South Africa’s Bravado Gaming team to travel abroad for competitions and qualification tournaments. The team, which competes in Counter-Strike: Global Offensive competitions, has moved from 188th to 18th in the world rankings. 

The industry is beginning to offer solutions to address the problem. Last year, video games publisher Ubisoft, maker of Rainbow Six Siege, brought servers online in South Africa, allowing local gamers to compete on a more even footing against players in Tokyo, London and New York. 

With the South African video games market expected to grow to R5.44bn ($292m) in 2023, according to Statista, a deep reservoir of eSport players and fans is being cultivated in the country. The boom has created a new class of celebrity “athletes” capable of endorsing products to a young, wealthy demographic. Some of the world’s top eSport celebrities earn seven figures, and travel with sports psychologists, physios, and professional masseuses. 

Since eSports is still in its infancy in Africa, firms can dip their toes into the market to capitalise on changing customer tastes, according to Futuresource’s Garrard.  

“This soon-to-be hotbed will become a lot more competitive very quickly, evidenced by the cultural transition amongst young people from wanting the same football boots as David Beckham, to having the same headset as gamers Ninja or PewDiePie.” 

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