From video games to online pokies: Main trends shaping entertainment in South Africa

When you think about growth in the 21st century, the Internet should be the first thing that comes to mind. The Internet has been a great source of growth cut across thousands, if not all, economic sectors.

Think about it, what primary industry in the world today thrives without the Internet? Is it agriculture, Tech, Fashion, or Entertainment? Nothing succeeds without the Internet today.

The reason is simple. The more we evolve, the more we require seamlessness, and that is what the Internet provides. Gone are the days of cables and video games. The main trend shaping the entertainment industry in South Africa today is online pokies.

According to PwC, data traffic will go near 18.7 billion GB by 2013. The statistic for data consumption in 2014 was roughly 1.6 billion GB. That number has more than quadrupled between 2014 and 2018. It is due to easier and more affordable access to the Internet as well as the affordability of smartphones.

These data are cut across broadband, tablets, smartphones, non-smartphones, and other portables. However, smartphones offer over 38% of the entire data.

 

Growing Entertainment Consumer Trends In South Africa

The entertainment industry, as we know, consists of video games, music, television, sports, virtual reality, the Internet, book and newspaper publishing, and radio.

The South African entertainment and media market revenue in 2018 is currently worth $15 billion, according to Africanews. This revenue includes the digital and non-digital entertainment and media sectors. The majority of this revenue in 2018 is from internet gaming, which is under digital entertainment.

With stiff gambling laws cut across various countries in Africa and the world at large, South Africa is one of the few countries where gambling is illegal. There are over 38 casinos licensed to handle the African market and thereby active online presence making it one of the biggest and most lucrative internet gaming countries in the world. At the point, Pokieslab Portal displays how online pokies work in South Africa nowadays.

From 2014 to 2018, the E&M industry had a steady growth in revenue. In 2014 the industry had a revenue of 90 million. In 2015 it went up to 100 million, which showed 10% in growth. From 2015 to 2018, the increase was quite stable.

If we take a look at specific segments in the entertainment and media industry, a projected look shows that the gaming industry will see over 35% in growth in the next five years(3.5million to 5.4 million). When this data is compared to 4 other major countries in Africa, such as Nigeria, Kenya, Ghana, and Tanzania, which has a total E&M revenue of $10 billion, $3 billion, $3 billion, and $598 million respectively, it shows how far ahead the South African iGaming and entire E&M industry is.

Internet

We have established the importance of the Internet in the 21st century. As the revenue for various sectors increase, so does that of the Internet. Let’s face it; these days, there is a lot to do on the net. The more there is to be done, and the more people will spend on access fees. It is why the South African internet sector is currently worth over R60 billion.

Mobile internet access has the highest revenue. Always have, always will, and for the simple reason that people spend more time on their mobile phones than on anything else. The growth in the internet sector has been a minimum of 20% since 2014 and has had a steady increase since 2014.

“Total Internet access revenue is forecast to increase at an 8.2% CAGR over the forecast period and reach R77.7 billion in 2023,” said PwC Insights from Entertainment & Media Outlook.

Video Games

In 2014, the video gaming sector was worth a total of R2 billion. In 2018 however, that number almost doubled with the industry averaging R3.5 billion. The South African gaming sector has seen rapid growth over the last couple of years, with casual/social gaming sectors making over 56% of the total revenue. This number is predicted to increase significantly to as high as 63% in 2023 and the entire video gaming sector to R5.4 billion.

The E-Sport sector consists of media rights, streaming advertising, sponsorships, consumer sales, and consumer contribution revenue. Among the lot, sponsorship revenue and streaming advertisements revenue have generated more income since 2014. While the growth has been steady, a projected look at revenue growth from that in the next five years sponsorship revenue will total over 30% of total revenue with its close second advertisement revenue coming way below that. While their growth level was even until 2018, a chart shows a slight difference in growth level in 2019, which is followed by significant differences in the following years.

iGaming

iGaming in South Africa has risen to become one of the biggest gambling markets in the globe. With over 38 licensed casinos in its shores, the sector has seen quite the level of growth since its inception. The industry covers online Betting, Casinos, Bingos, and LPMs. Some of the biggest and most diverse companies in the iGaming sector are in South Africa. 

The iGaming business started in 2017 and since then have also had a considerable amount of growth. Online betting and casinos are, however, the top dogs in this sector, with both covering well over 70% of the entire iGaming sector, which is set for a quite a steady growth in the next three years according to the projections of the national gambling board of South Africa.

VR

2019 is the second full year of technology’s commercial availability, South Africa’s Virtual Reality revenue rose by 85% in 2018 to a whopping R75 million. Although Virtual Reality remains a niche category in the tech industry, the industry is slowly overcoming the significant challenges which fight against its growth. Some of these include the availability of content, comfort, compatibility, and affordability. It also continues to attract serious investment from major media and technology companies eager to seize a share of this fast-growing market. Among the various virtual reality sectors which are:

• Video
• Gaming
• App

Video and gaming take over 90% of total revenue. According to PwC, gaming generates a total of 58% of the entire VR revenue, and video takes 38% in 2019. In projection, the growth was shown to be steady in the next four years.