The South African video game market generated revenues of R2.2 billion in 2012, up from R1.5 billion in 2008.
This is according to a PricewaterhouseCoopers (PwC) report on SA's gaming industry.
Fuelled by growth in digital and mobile gaming in particular, revenues are forecast to grow by a compound annual growth rate (CAGR) of 9%, to reach R3.3 billion in 2017.
The report states that online gaming spend will continue to be the fastest-growing segment, with a 15.7% CAGR, growing from R124 million in 2012 to an estimated R257 million in 2017. The biggest benefit of online games is that they can be used both by single and multiple players and, therefore, appeal to a wider market.
It also notes that social networking has been an important driver for the online gaming industry due to its broad appeal, which has opened up video gaming to a much broader audience.
The report forecasts that the future of the console market will be heavily influenced by highly anticipated next-generation devices from the likes of Sony and Microsoft. The PlayStation 4 will be available in SA in December, while the Xbox One is expected to launch either at the end of 2013 or early 2014, and Nintendo's Wii U is already available.
Mobile gaming is growing in popularity, the PwC report finds, with the new generation of smartphones and tablet computers accelerating sales. Apart from free offerings like Farmvilleand CityVille on Facebook, the likes of Infinity Bladeand Angry Birdshave also become bestsellers. Mobile gaming spend is expected to grow from R694 million in 2012 to R1.3 billion in 2017, at a CAGR of 13.5%, with the report highlighting that users are attracted to these games because they are simple, entertaining and easy to play.
PC gaming revenues, referring only to the retail sales of PC games, continue to decline in all markets, says PwC. In SA, PC gaming revenues are expected to drop in value from R394 million at their peak in 2012 to R358 million by 2017, the report states. Early strength in the PC gaming market and the multi-generational console market offer a stable platform for future gaming and a launch-pad to the rest of the continent, it continues.
According to the report, tablets, which are still a largely untapped market, will boost mobile gaming over the medium term, as they offer the convenience of mobile broadband and a 'play anywhere' ethos. The multifunctionality and convenience of tablets and smartphones is expected to result in a decreased demand for handheld consoles in the near future.
In a growth market like SA, engaging with the emerging middle-class as it increases its spending power presents significant opportunities, says PwC. Today, per-head annual spending on games is just R41, compared to around R328 in Western Europe and R90 globally.
There is a significant opportunity, says PwC, to use the country as a platform from which to launch game services in neighbouring markets and indeed much of the rest of the continent.
Share