Africa’s Gaming Revolution: Fintech Innovation to the Rescue
Lucy Hoffman
Africa is the final frontier for the video game industry. Over the past few years, gaming has become the dominant form of entertainment globally, grossing nearly $350 billion worldwide in 2023, according to one industry executive. With the last decade’s rise of mobile gaming, the sector is now bigger than movies, music and streaming combined, moving the industry’s audience beyond former archetypical customers of US-based adolescent boys who could afford the relatively pricey gaming console.
This year, Africa solidified itself as the fastest-growing market for the mobile games industry. That is hardly surprising given demographic trends in the region – the continent has the fastest-growing population in the world, with more of it classed as millennials or Generation Z than the United States and China combined.
By 2050, 25% of the world’s population is expected to be African. Combine that with the rapid adoption of smartphones, and you can see strong organic growth of new gamers engaging with popular mobile games such as Call of Duty Mobile, FC Mobile or Clash of Clans.
Serving this new generation of players still presents challenges. For example, just 3.92% of Africa’s population can access a credit card. However, herein lies fintech’s transformative potential for gaming as well as financial inclusion continent-wide.
The African gaming industry is emerging as the fastest-growing for mobile gaming, driven by a young population, increasing smartphone adoption and a burgeoning interest in mobile games. Limited access to traditional banking in Africa presents a unique opportunity for fintech innovations. Mobile money facilitates digital payments and expands the gaming industry across the continent.
The growth of direct-to-consumer strategies in gaming allows game developers and companies to increase margins and engage more directly with consumers by bypassing app stores.
Africa is the final frontier for the video game industry. Over the past few years, gaming has become the dominant form of entertainment globally, grossing nearly $350 billion worldwide in 2023, according to one industry executive. With the last decade’s rise of mobile gaming, the sector is now bigger than movies, music and streaming combined, moving the industry’s audience beyond former archetypical customers of US-based adolescent boys who could afford the relatively pricey gaming console.
This year, Africa solidified itself as the fastest-growing market for the mobile games industry. That is hardly surprising given demographic trends in the region – the continent has the fastest-growing population in the world, with more of it classed as millennials or Generation Z than the United States and China combined.
By 2050, 25% of the world’s population is expected to be African. Combine that with the rapid adoption of smartphones, and you can see strong organic growth of new gamers engaging with popular mobile games such as Call of Duty Mobile, FC Mobile or Clash of Clans.
Serving this new generation of players still presents challenges. For example, just 3.92% of Africa’s population can access a credit card. However, herein lies fintech’s transformative potential for gaming as well as financial inclusion continent-wide.
In recent years, there has been an explosion of innovation concerning payments in Africa, with many areas leapfrogging traditional banking methods and directly embracing digital payments. In Nigeria, for example, fintech unicorns, including Opay, Flutterwave and Interswitch, are coming one after the other. Kenya has the most mature and robust mobile money market in the world, much thanks to Safaricom’s M-PESA mobile banking service.
Mobile money is so prominent in the region that Sub-Saharan Africa comprises 66% of global mobile money transaction value – making it the world’s leader in mobile money innovation and adoption. In North Africa – Fawry (Egypt) and WafaCash (Morocco) are among those helping to bring their largely cash-based economies online.
These fintech offerings have enormous implications for profitably scaling games in Africa. Historically, the traditional app stores have made it seamless for game developers in Los Angeles to publish their games globally and get paid US dollars, regardless of where their customers were based.
However, these traditional platforms have yet to keep up with the rate of fintech innovation in Africa. As a result, many willing customers are unable to transact leveraging payment methods that are accessible and ubiquitous – excluding them from fully experiencing the entertainment, connection or competition they seek. Importantly, it prevents game developers across Africa from being able to build profitable businesses that serve their home audience.
Arts and entertainment present a huge opportunity for economic growth across the continent if the platforms exist to connect creators with their customers. What’s more, the knock-on effects extend beyond the creative economy. Today, for example, the Carry1st Shop offers a wide selection of vouchers for essential services such as electricity or prepaid mobile phones and internet services. There’s no ambiguity here – fintech and gaming is a partnership where everyone stands to benefit.
*Huffman is co-founder and Chief Operating Officer of World Economic Forum
WORDS ON MARBLE
Things started moving online. Many state governments did not know how to generate revenue from this industry. That’s where we came on board. We came on board again, not just even helping them in terms of the law or in terms of revenue collection, but we came in terms of investing in a proper state lottery, but I think they did not understand what it meant, and many people felt threatened. They did not seem to understand the structure of the transaction. There was a bit of frustration. Eventually, we went on to work in Anambra State for years, maybe seven years or thereabout, but the full value of what we could have brought couldn’t succeed because it became politicised
