In-app spending on the rise in the African gaming apps market

In-app purchases and gaming apps are gaining momentum in Africa, with Nigeria, South Africa, and Kenya leading the way.

In-app spending on the rise in the African gaming apps market

Gaming and esports have become billion-dollar industries, with various competitions and gaming apps generating millions of dollars. Africa is catching up with the gaming culture, and three major countries are leading the way.

The mobile gaming industry has continued its meteoric growth due to the pandemic and stay-at-home orders, with more people choosing gaming apps as their favorite entertainment and pastime. As of the first quarter of 2021, gaming apps were the most popular app category in the Google Play Store, accounting for 13.7% of all available apps. The number of gaming apps in the Google Play Store has also jumped by 40% in a year and hit almost 480,000 in the first quarter of 2021 alone.

In the first quarter and first half of this year, consumer spending in mobile apps had already hit new records at $32 billion and $64.9 billion, respectively. Popular casual mobile game coin master was the top-grossing gaming app among Android users, with over $61 million in revenue in Q1. Garena Free Fire-World Series and PUBG mobile-Karakin followed with $38.5 million and $37.7 million in revenue respectively.

The African mobile gaming app market

Esports and online gaming have taken off in Africa, and being the world's youngest continent, the growth and traction is only going to get better.

According to a Newzoo report, there are over 700 million gamers in Africa, Europe, and the Middle East combined. This could mean that gamers in Africa number in the millions, with potentially more to join in the near future.

The lockdown orders in most African countries contributed largely to the growth seen in mobile apps downloads, particularly in gaming apps. For example, in 2020 app installs increased by an estimated 20% across South Africa, Nigeria, and Kenya, with South Africa seeing the majority of growth at nearly 18% increase in app downloads.

Appsflyer and Google released a report highlighting the growth of the African app market and offering very interesting insights into consumer habits on the continent. The report indicates that from Q1 of 2020 and Q1 of 2021, the African mobile app industry increased by 41% in overall installs. This was analyzed from 6,000 apps and 2 billion installs in the three most prominent technology markets in Africa; South Africa, Kenya, and Nigeria. During this period, Nigeria registered the highest growth, with a 43% increase in app downloads; South Africa saw a 37% growth during this period and Kenya increased by 29%.

According to the report, gaming apps showed very strong performance between Q1 and Q2 2020. Gaming apps experienced 50% growth. When this growth is compared to a mere 8% increase in non-gaming apps, most prominently EdTech apps, the traction is quite clear. It follows a global trend where gaming apps surged to a record high in 2020, at 14 billion downloads globally.

However, the biggest trend was in-app purchasing revenue. Low spending power may be a concern in Africa, but this does not seem to affect gamers, who represent the bulk of the African youth demographic.

In Q3 2020 for instance, in-app purchasing revenue numbers grew with a staggering 136% increase compared to the previous quarter, accounting for 33% of 2020’s total revenue. In-app purchasing revenue among South African consumers increased by 213%, while Nigeria and Kenyan consumers recorded 141% and 74% increases, respectively.

Gaming and esports are becoming a potential economic driver for Africa, and firms are beginning to notice.

For example, Nodwin Gaming, an Indian licensor, and creator of eSports properties announced its expansion into South Africa with the opening of a new office. The firm has also invested in Nigeria and Kenya. With the South African video games market expected to grow to R5.44bn ($292m) in 2023, a vast talent pool of eSport players and fans is being nurtured in the country.

From all indications, these numbers are only going to keep getting bigger for the gaming industry.

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