The video games industry in Sub-Saharan Africa is expected to generate over $1bn for the first time in 2024, according to data shared with CNBC.

The figures, which were compiled by Dutch research firm, Newzoo, for African gaming startup Carry1st, suggest a buoyant market for gaming in Africa, where economic growth has been sluggish as the region grapples with lingering inflation, tough financial conditions and high net debt.

Sub-Saharan Africa’s economic growth rate dipped to 3.6 per cent in 2022 from 4.1 per cent in 2021, according to the World Bank. And it is forecast to fall further in 2023, to 3.1 per cent.

Despite that, Africa’s video game market has been doing well. In 2022, games sold in the region generated $862.8m in revenue, up 8.7 per cent year over year, according to Newzoo’s data.

That is in defiance of a broader contraction in video game activity globally, as the tailwind of COVID lockdowns wears off and a higher cost of living has forced consumers to tighten their belts.

The global games market generated $182.9bn of revenue in 2022, down 5.1 per cent from 2021, according to Newzoo.

The Chief Executive Officer of Carry1st, Cordel Robbin-Coker, which is headquartered in Cape Town, said the most notable thing about the data was the “underlying secular growth in the games market in sub-Saharan Africa.”

“Looking back, we know that COVID was a significant contributor,” Robbin-Coker said. “But now that those benefits have receded, we are starting to see growth slow and even decline in other markets.”

Adoption of smartphones, in particular, has boosted Africa’s gaming prospects. A higher-than-normal young population in the region means digital technology has been strongly embraced.

By 2030, 87 per cent of the population in sub-Saharan Africa will own a smartphone, according to mobile industry body GSMA, up from 51 per cent in 2022.

The global gaming industry is expected to return to growth this year, with analytics firm Ampere Analysis forecasting it will increase by 3.3 per cent in 2023, driven by mobile gaming “returning to some form.”

But it is a far cry from the blistering growth of 2020 and 2021, when the coronavirus pandemic forced people inside their homes and allowed people to spend more of their spare time playing games.

“The potential of disruption to user acquisition from future platform privacy changes, plus a broader audience less resilient to changing macroeconomic conditions, means that mobile gaming market performance has become less predictable than in the past,” said Louise Shorthouse, analyst at Ampere Analysis.

In Africa, much of the growth in games was driven by smartphone usage.

According to Newzoo, mobile gaming generated $778.6m in revenue in 2022, accounting for about 90 per cent of total game sales. Nigeria led the way in total annual gaming revenue, attracting $249m, followed by South Africa, which generated $236m in revenue.

South Africa was previously Africa’s largest video gaming market, according to Newzoo. The next highest-revenue-generating countries were Kenya ($46m), Ethiopia ($42m), and Ghana ($34 million).

Ethiopia recorded the highest year-over-year growth — 13 per cent, while Uganda was the slowest-growing games market, increasing only six per cent. Nigeria and South Africa contributed two times the revenue of the other eight top countries combined, according to Newzoo. All 10 of the countries had year-over-year sales growth.

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