Game developers in SA are frustrated with the lack of support from large distributors and are starting to look to move to more conducive African markets.
Jonathan Smit, CEO of local game development house Nanogames, says the company has been fighting for local distribution since it developed its AAA-rated multiplayer gaming platform. "SA is not really a friendly environment when it comes to start-ups, and the gaming market is no different," he says.
The initial development of the platform was built specifically for the South African environment, which has low levels of broadband penetration. "It was an innovative platform even at the time of development. Still, no private equity company nor the banks would consider giving us a loan to publish," states Smit.
Nanogames business development head Dan Seidman says the distribution companies are reluctant to distribute titles developed locally. "We had some interest from international companies, but we want to stay proudly 'Klerksdorpian'. However, we have given up looking for distribution support."
The company has developed several large titles that are being distributed internationally by mass-market stores like Wal-Mart, Kmart and BestBuy, but there is no local distribution of these games. "We have grown a lot since the development of our platform and are selling individual titles successfully everywhere but here," says Seidman.
Nanogames is considering moving the company to Botswana, which - according to Seidman - is encouraging small business to assist with up-skilling locals. The company has developed iBurst's iGame online platform.
Not good enough
The Amateur Gamers Association of SA (Agasa) says competing with large publishers like Electronic Arts in SA is difficult for local developers. "They are not getting the support that they should," says Agasa founding member, Johan von Backstrom.
"It is difficult for local developers to get their products recognised in this industry."
Von Backstrom says Agasa pegs the local market to be roughly worth R300 million, with around a million game units sold last year. "This is just an estimate, but the industry is definitely worth looking at."
MegaROM, one of SA's game distributors, says there is little to no local development to speak of. According to Jason Borea, MD of MegaROM, the gaming market is highly competitive and games need to be top-notch to make it.
"Most of the games we have seen that were produced locally are not up to scratch in terms of the international quality standards we are seeing. At the end of the day, we are also a business."
However, Borea says the company has not closed its doors to South African game creators. "If developers have games rated at international level, we will always be open to reviewing them and even distributing them."
According to Steven Ambrose, MD of strategy at World Wide Worx, SA's circumstances are not suited to game development. He lists the restrictive capping of broadband and the low penetration of the Internet in SA as primary reasons.
"The environment is not conducive to any development, let alone gaming," Ambrose states.
Industry players agree there is a massive market for revenue in the local gaming market. According to research by MDB Capital, gaming brings more revenue than the US movie market at an estimated $12.5 billion and is expected to hit $50 billion by 2012.
(Additional reporting by Patricia Pieterse.)
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