Leading Gaming Experts Unite to Discuss Growth Opportunities in Africa 

Iyke Bede reports the outcome of a recent convergence of gaming experts in Africa on how to go about monetising their work

Before the COVID-19 pandemic influenced a surge in interest in gaming, the global gaming industry revenue maintained a steady year-on-year growth. The continued growth will be projected to see the sector exceed a revenue of $583.69 billion by 2030. 

Africa is considered one of the fastest-growing gaming markets in the world, growing from 77 million users in 2015 to 186 million users in 2022. Several factors contribute to this growth, including a growing middle class with disposable income, increasing access to affordable technology and internet penetration, and a teeming youth population. 

Currently, the industry is valued at $590 million. However, a huge percentage of the spending is earned by international gaming companies, leaving a measly amount for the stakeholders in Nigeria. 

This dearth in earnings of the more than a decade-old gaming industry in Nigeria recently spurred the convening of gaming experts to dissect some of the issues affecting the African gaming industry. 

Powered by GameStar Exchange, a leading decentralised P2P trading platform, the Twitter Space event with the theme ‘The Business of Gaming in Africa’ pooled Co-founder, AfricaComicade, Oscar Michael, and game developer Edu Shola to highlight some of the challenges facing growth to proffer sustainable solutions. 

Right off the bat, Michael emphasized that the changes in the technology landscape have made it relatively easier for developers to access hardware and software needed to create games, however, he maintains that the major problem faced by game creators was a lack of understanding as to how to go about monetizing their work. 

Breaking down the processes for monetizing their projects, Shola elucidated that developers can woo publishers through online pitching their games to publishers. However, he noted that this could be tedious and that research must go into understanding trends in the industry and specific benchmarks created by specific publishers.

“You can find a publisher, and they do all the work for you,” Shola affirmed. “They will help you publish and get it out to the right audiences, and sometimes, they pay you upfront once they publish the game.”

Alternatively, he suggested using product placements sponsored by brands within the game to generate direct revenue, selling the game app on various app stores, or using in-app purchases, that is, features that serve as tools for power-up, change of costumes, or weapon upgrade. 

He also noted that in-app purchases open more opportunities for nonfungible tokens (NFT) and cryptocurrency in web 3.0 (blockchain gaming), where the game publisher takes a fee for each transaction. 

While blockchain is a great monetizing tool, Michael revealed a dark side to it— play-to-earn. Play-to-earn is a subset of blockchain gaming where players are rewarded for playing. 

“It is good for most of the users, and that’s why there is a whole lot of trend and buzz. But then it takes focus away from the play, and that’s barely something that most stakeholders stand for,” he explained. “In 2022, there was a rise in the number of game studios looking at blockchain gaming, and the simple reality was about adding more players to their platforms.” 

Michael further explained that play-to-earn didn’t translate to a good gaming experience, especially when one of the players has an unfair advantage over the other through the purchase of in-app features. He said their wins come at a high cost. 

He noted that although they might earn up to $800 to $1,000, “at the end of the day, they end up spending up to $700 to purchase special features to gain an edge.” 

In addition to watering down the gaming experience, blockchain gaming contributes to climate change, owing to how they are coded to use more electricity. He advised that gamers should embrace green coding for sustainability. 

Another vital area reviewed during the hour-long virtual event was the relationship between game developers and game publishers in terms of earned royalties. Some argued that game developers were always taken advantage of by publishers who take a huge chunk of the revenue generated by published games, sometimes up to 90 per cent of revenue. 

Michael elaborated that these cases occur from game developers not understanding the ramification of signing deals without any business and legal counsel. He says this is a problem AfricaComicade is trying to eliminate through its various works in the gaming space. 

“We all know that the business in itself is rough and tough. There are lots of sharks out there. The problem is not the fact that publishers are cheating, the problem is those game developers are mostly not business people, so they don’t understand the dynamics of running a game studio,” Michael explained. “We have more developers than we have entrepreneurs in the creative space.”

He added, “You ask people to create pitches, create business models and financial models, research, on how to pivot, these are the things that people in the creative space don’t do. The creative industry is mostly driven by passion. They have an idea and they just want to see it come to fruition.”

According to him, every organisation has a process, and what might be a “shitty deal for you might be an awesome deal for another person.” 

“The question is, do you understand what you are signing into?” Michael stated.