A “dizzying rise” of video games will contribute to South Africa seeing a strong compound annual growth rate of 7.6% for consumer revenue over five years‚ moving from R93.9-billion in 2017 to R135.7-billion in 2022.
This is according to PwC’s “entertainment and media outlook: 2018-2022: An African perspective” report‚ released on Wednesday (today).
Video games will surpass books‚ magazines and B2B to become the third-highest contributing consumer segment‚ the report predicts.
Music is also “up for a healthy future” after several years of depressed growth‚ the report states‚ with the streaming revolution having had positive implications for TV and video.
Honing in on the video games market‚ the report states: “App-based social/casual revenue has exploded — in 2013 it accounted for 17% of total video games revenue‚ and 46% in 2017‚ with the forecast for 2022 being 70%. This has been driven by the increasing proliferation of smartphones‚ providing an accessible and affordable route into the gaming market for millions of consumers.”
Developers too have become more skilled at implementing “freemium” mechanics — offering a zero-cost point of entry‚ but luring regular micro-transactions from an increasing proportion of their users‚ PwC notes.
With the boost further given by the “wildly popular‚ battle royale-type games” reaching mobiles — Fortnite Battle Royale has already launched on iOS‚ and soon Android will follow suit — and the increased graphical capabilities afforded by ever more sophisticated phones and faster broadband speeds‚ PwC believes “this transformation of millions of consumers into ‘gamers’‚ is set to deliver growth far above the consumer average“.
The related area of virtual reality (VR) is also expected to provide a boost: “Although‚ with the install base of VR headsets currently still low‚ VR companies are focusing on services for businesses to forge a profit. As developers gradually master the medium’s potential‚ its revenue is likely to rapidly start building critical mass. The exceptional compound annual growth rate of 55% currently comes off a low base‚ but reflects the excitement in this space.”