Gaming is a big business in SA

The clue that gaming has become big business in South Africa was delivered by a nongaming brand.

When Comic Con, an American popular culture convention that has become a mecca for comics enthusiasts, was hosted in South Africa for the first time last month, it used gaming as the major drawcard. More than 45 000 people attended.

The event and its attendance was expected to be a major dampener for the annual rAge gaming expo, which took place just weeks later. Instead, rAge saw only a marginal fall in visitor numbers. No less than 34 000 people descended on the Ticketpro Dome for the chaos of cosplay, LAN gaming, virtual reality, board gaming, and new video games.

It proved not only that there was room for more than one major gaming event, but also that a massive market exists for the sector in South Africa. And with a large market, one also find numerous niches that either emerge afresh or keep going over the years. One of these, LAN (for local area network) gaming, which sees hordes of players camping out at the venue for three days to play each other on elaborate computer rigs, was back as strong as ever at rAge.

MWeb provided an 8Gbps line to the expo, to connect all the gamers and recorded 120TB in downloads and 15Tb in uploads – a total that would have used up the entire country’s bandwidth a few years ago.

Michael James, senior project manager and owner of rAge, says: “LANs are supposed to be a thing Pictures: iStock of the past, yet we buck the trend each year. It is more of a spectacle than a simple LAN, so I can understand.”

New phenomena, often associated with the flavour of the moment, also emerge every year.

“Fortnite is a good example this year of how we evolve,” says James. “It’s a crazy, huge phenomenon and nobody was servicing the demand from a tournament point of view. So rAge and Xbox created a casual LAN tournament that anyone could enter and win a prize. I think the top 10 people got something each round.”

All eyes, however, are on the new word in global spectator sport: esports. In SA, it is early days, with total prize money across all tournaments in the single millions of rands. In the US, the top tournament has a $25 million (R356 million) prize bag.

James points out that esports is now still an unknown entity in South Africa. “There are many gamers, people and companies interested, but not everyone is approaching it in the right way.

“It will be a very different beast in two to three years, but it’s hard to say what it’ll look like exactly.” It helps that major technology manufacturers are beginning to see gaming moving from a peripheral niche interest to the core of their business.

Acer, with its Predator and Helios brands, says it understands the need to offer affordable, quality devices in a receding economic climate as key to growing the gaming segment. Primarily, though, it is dedicated to helping its customers “dominate rivals with gaming features that give gamers an overwhelming advantage”.

Dell’s Alienware range and HP’s Omen computers have a similar intent. All three computer makers, however, understand that it is a growing niche that will help save the overall PC market.

“We see gaming as one of the core elements of our PC business,” says David Rozzio, managing director of HP South Africa. “We relaunched our gaming strategy, launched Omen by HP, and developed a portfolio that can serve different kinds of gamers.

“We started from scratch three years ago to build a $1 billion segment worldwide. The market is supporting that, because it is growing overall worldwide.

“We see big trends in terms of big events bringing in both spectator gamers and enthusiast gamers, who have grown gaming on PC to a $9 billion business across all manufacturers.”

HP expects the SA gaming industry to reach a value of R3.6 billion next year.

Ironically, increases in the price of petrol and import duties are seen as a contributor, since more people will have to stay home and play games. Consoles play a major role in that market, with PlayStation, Xbox and Nintendo dominating that market.

“When it comes to casual gaming, there is close to a 50-50 split between PCs and consoles. On the more competitive side, it is 85% PC and 15% console. As gamers progress from casual to competitive, or casual to hard core, PC is where it’s at,” says Rozzio.

HP is a major sponsor of esports globally, and Rozzio says it is looking for a team to support in South Africa, as well as supporting esports in general. “esport in South Africa is still in its infancy; it’s still a very small market and we need to inject more support into this industry, develop it, and use local teams to make it grow.”

He believes that, despite being so new to the gaming market, HP already has about a 20% share of the PC gaming sector, and is growing that share. Its consumer PC sales grew 150% in the past year, and its gaming segment has been growing in tandem. Given that it has a 28% market share in PCs generally, it sees big business growth in gaming machines.

What happens next in esports will also help drive sales of gaming machines. And the biggest thing of all could be the Olympic Games.

“The International Olympic Committee (IOC) convened in July to debate a potential roadmap to bring esports into the Olympics,” says Rozzio. “It’s early days and we’re certainly some years away from a firm commitment, but the IOC is intently watching the rise of esports with an open mind.

“But if the global growth of esports continues at its current pace, the question may one day be: Will esports allow traditional Olympic sports to share its even larger spectator platform?”

Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za Follow him on Twitter and Instagram on @art2gee