Harness Africa's gaming potential with local payment options

Harness Africa's gaming potential with local payment options

August 14, 2023
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Africa is a continent with vast untapped potential in the gaming industry. While the region does have challenges, such as inadequate government-supported regulations and a robust internet infrastructure, developers and publishers can still benefit from expanding their payment coverage on the continent. Accepting local payment methods can help games reach a bigger audience and unlock new revenue opportunities. 

Those opportunities are especially evident for mobile games. With the increasing accessibility of inexpensive mobile devices, Africa's mobile gaming market continues to experience rapid growth. Based on a study by Carry1st and Newzoo in 2021, the number of gamers in Sub-Saharan Africa more than doubled over six years to an estimated 186 million. 95% of those gamers were mobile game players, highlighting the significant influence of mobile devices in driving Africa's gaming culture.

And while most transactions on the continent are still cash-based, new payment methods and digital currencies open up additional avenues for businesses, especially in the gaming industry. It's a great time to tap into this emerging market. As one of the fastest-growing regions globally, Africa is home to a lot of gamers actively seeking fresh and thrilling gaming experiences.

Challenges affecting the African gaming market

Right now, Africa lags behind the rest of the world regarding digital infrastructure, like fiber networks, broadband connectivity, and data center processing capabilities. The lack of a reliable internet can pose a significant barrier, limiting access to online gaming, multiplayer experiences, and even reliable payment systems. Fortunately, recent investment incentives are helping the continent's digital growth, particularly in Sub-Saharan Africa. And this growth could profoundly impact the continent, allowing more people to access the internet and related services.

Other challenges stem from inadequate support from governments and policymakers. The gaming industry often lacks legal and regulatory frameworks to protect developers and publishers from piracy and unauthorized distribution. This absence of protection can deter investment and innovation in the gaming sector.

Yet, Africa is undeniably leading the way in mobile gaming. With the implementation of appropriate infrastructure and policies, the gaming industry has the potential to sustain its remarkable growth trajectory. 

Opportunities for mobile payments in Africa 

The considerable interest in the continent's long-term gaming developments from outside the region has already led Africa toward positive change in the digital landscape. Africa attracts investments from venture capitalists and other gaming-minded investors worldwide. The influx of financial support stimulates the industry's growth by providing development, marketing, and infrastructure resources. This investment trend reinforces the potential profitability and sustainability of the overall gaming market.

Worth noting here is that, unlike Western gaming markets, Africa has had a mobile-first approach from the beginning. This focus on mobile platforms has shaped the gaming economy and made it more conducive to sustainable growth, especially around the ever-evolving consumer payment trends.

One advantage of this mobile-centric approach is the ease of implementing innovations like digital currencies, which can be adopted quickly and with minimal disruption. That presents a unique opportunity for both African gamers and developers who want to enter the market to embrace and leverage new technologies in gaming industry payments. Also, as technology and infrastructure advance, reaching previously underserved areas with mobile gaming experiences will become easier. 

Additionally, there is room for developing new game genres and content specifically tailored to the African market. By incorporating local cultural elements and preferences, game developers can cater to the unique interests of African gamers to foster stronger connections and engagement. That will allow for broader accessibility and faster adoption of gaming across diverse regions of Africa.

Local and preferred payment methods in South Africa

With more than 24 million gamers, South Africa is currently the country with the largest video game market in Africa. With 40% of the population playing video games, the market is gradually advancing to overtake other industries like music and film.

Security is essential for South African consumers when choosing payment options, as it is for everyone, everywhere. South Africans still perceive traditional payment methods as more secure than emerging digital alternatives. In South Africa, 79% of consumers consider swiping or inserting a debit or credit card as the most secure payment method.

While traditional payment methods such as cash and card transactions continue to be popular, there is a growing trend towards emerging digital payment options. In the past year, 75% of users have increased their usage of at least one digital payment method. And an overwhelming 97% of users expressed their likelihood to adopt a digital payment method within the next 12 months. Account-to-account payments, digital money transfer apps, instant payment services, and digital credit or debit cards are top preferences for users, with adoption rates of 86%, 81%, 80%, and 78%, respectively.

Ease of use and rewards also play significant roles in determining the preferred payment method for South Africans. Around 51% of respondents prioritize convenience, and 44% carefully examine the rewards offered when choosing their payment option. Pay with Points, a collaboration between Mastercard and Xsolla, would likely be welcomed as an alternative payment method, as users could redeem credit card loyalty points for gaming purchases.

Xsolla offers extensive payment coverage in Africa, including local and global options that South African gamers know and trust. Accepting these payment methods will help boost your audience reach and overall game revenue. Here is a list of the region's preferred payment options and brands.

  • Visa - this is the preferred credit card in South Africa, with a 48.6% share
  • PayPal - First National Bank (FNB) account holders can easily make payments and withdrawals using their bank accounts; FNB has also made it possible for non-FNB account holders to withdraw funds paid into their PayPal account to their bank accounts at other banks
  • Ukash - this voucher-based payment system allows buyers to make online payments without needing a bank account or credit card
  • Ozow Pay by Bank - seamless payments for QR codes, eCommerce, e-billing, payment request links, point of sale, payouts, and refunds
  • Cell Pay Point - this easy-to-use online payment solution is not limited to credit card payments, as FNB's online banking clients can use this to pay merchants using their mobile phones
  • Zapper - this is a locally developed smartphone app launched in July 2014 that facilitates mobile payments
  • FlickPay - also launched in July 2014, this local company uses technology from wiGroup, a business that specializes in integrated point-of-sale mobile transactions

The gaming market in Kenya

The trend continues in Kenya, with its video game market experiencing rapid growth and development. With the introduction of broadband internet in 2009, a new generation of tech-savvy youth has emerged, contributing to a thriving game industry. In fact, Kenya has now emerged as one of the leading game hubs in Africa. Statista projects Kenyan gaming revenue to reach US$66.4M in 2023, and US$100.5M by 2027. 

The availability of high-speed internet access played a crucial role in this development. It fueled the expansion of gaming cafés and tournaments, catering to an increasing number of online players. These gaming venues have transformed the local gaming landscape and provided platforms for gamers to connect, compete, and showcase their skills.

The rapid expansion of the video game market in Kenya reflects the enthusiasm and potential for growth within the African gaming industry. As the sector continues to evolve and attract attention, it presents opportunities for talented individuals to pursue careers, create innovative games, and contribute to the overall development of the gaming ecosystem in Kenya.

Local and preferred payment methods in Kenya

As of 2022, cash remained the primary payment method used in online retail in Kenya, with 40% of the total share. Card payments came in at 25%, with most digital platforms accepting credit and debit cards in the country.

  • M-Pesa - this smartphone-based money transfer and microfinancing service allows those without a bank account to transfer funds by sending a text message; the "M" stands for mobile, and "Pesa" is Swahili for money

2023 is a great time to expand into the African gaming market

The future of gaming in Africa looks very promising. As the number of gamers in Africa grows, the games industry will become an increasingly important sector in African economies, potentially earning millions annually. Newzoo even projects that the Sub-Saharan African gaming market will generate over $1 billion in 2024. 

Nearly a third of gamers already pay for games, and as noted, African consumers are quick to adopt the ease and convenience of mobile payments. This is a great time if you're a game developer or publisher looking to enter the African gaming market. You can use Xsolla's Payments solution to accept various local payment methods and instantly build trust in your brand as you expand. 

To learn more about Xsolla’s extensive payment solutions, contact an expert from our team. Or create your account to start exploring Xsolla’s full offering of services for game developers.

Africa is a continent with vast untapped potential in the gaming industry. While the region does have challenges, such as inadequate government-supported regulations and a robust internet infrastructure, developers and publishers can still benefit from expanding their payment coverage on the continent. Accepting local payment methods can help games reach a bigger audience and unlock new revenue opportunities. 

Those opportunities are especially evident for mobile games. With the increasing accessibility of inexpensive mobile devices, Africa's mobile gaming market continues to experience rapid growth. Based on a study by Carry1st and Newzoo in 2021, the number of gamers in Sub-Saharan Africa more than doubled over six years to an estimated 186 million. 95% of those gamers were mobile game players, highlighting the significant influence of mobile devices in driving Africa's gaming culture.

And while most transactions on the continent are still cash-based, new payment methods and digital currencies open up additional avenues for businesses, especially in the gaming industry. It's a great time to tap into this emerging market. As one of the fastest-growing regions globally, Africa is home to a lot of gamers actively seeking fresh and thrilling gaming experiences.

Challenges affecting the African gaming market

Right now, Africa lags behind the rest of the world regarding digital infrastructure, like fiber networks, broadband connectivity, and data center processing capabilities. The lack of a reliable internet can pose a significant barrier, limiting access to online gaming, multiplayer experiences, and even reliable payment systems. Fortunately, recent investment incentives are helping the continent's digital growth, particularly in Sub-Saharan Africa. And this growth could profoundly impact the continent, allowing more people to access the internet and related services.

Other challenges stem from inadequate support from governments and policymakers. The gaming industry often lacks legal and regulatory frameworks to protect developers and publishers from piracy and unauthorized distribution. This absence of protection can deter investment and innovation in the gaming sector.

Yet, Africa is undeniably leading the way in mobile gaming. With the implementation of appropriate infrastructure and policies, the gaming industry has the potential to sustain its remarkable growth trajectory. 

Opportunities for mobile payments in Africa 

The considerable interest in the continent's long-term gaming developments from outside the region has already led Africa toward positive change in the digital landscape. Africa attracts investments from venture capitalists and other gaming-minded investors worldwide. The influx of financial support stimulates the industry's growth by providing development, marketing, and infrastructure resources. This investment trend reinforces the potential profitability and sustainability of the overall gaming market.

Worth noting here is that, unlike Western gaming markets, Africa has had a mobile-first approach from the beginning. This focus on mobile platforms has shaped the gaming economy and made it more conducive to sustainable growth, especially around the ever-evolving consumer payment trends.

One advantage of this mobile-centric approach is the ease of implementing innovations like digital currencies, which can be adopted quickly and with minimal disruption. That presents a unique opportunity for both African gamers and developers who want to enter the market to embrace and leverage new technologies in gaming industry payments. Also, as technology and infrastructure advance, reaching previously underserved areas with mobile gaming experiences will become easier. 

Additionally, there is room for developing new game genres and content specifically tailored to the African market. By incorporating local cultural elements and preferences, game developers can cater to the unique interests of African gamers to foster stronger connections and engagement. That will allow for broader accessibility and faster adoption of gaming across diverse regions of Africa.

Local and preferred payment methods in South Africa

With more than 24 million gamers, South Africa is currently the country with the largest video game market in Africa. With 40% of the population playing video games, the market is gradually advancing to overtake other industries like music and film.

Security is essential for South African consumers when choosing payment options, as it is for everyone, everywhere. South Africans still perceive traditional payment methods as more secure than emerging digital alternatives. In South Africa, 79% of consumers consider swiping or inserting a debit or credit card as the most secure payment method.

While traditional payment methods such as cash and card transactions continue to be popular, there is a growing trend towards emerging digital payment options. In the past year, 75% of users have increased their usage of at least one digital payment method. And an overwhelming 97% of users expressed their likelihood to adopt a digital payment method within the next 12 months. Account-to-account payments, digital money transfer apps, instant payment services, and digital credit or debit cards are top preferences for users, with adoption rates of 86%, 81%, 80%, and 78%, respectively.

Ease of use and rewards also play significant roles in determining the preferred payment method for South Africans. Around 51% of respondents prioritize convenience, and 44% carefully examine the rewards offered when choosing their payment option. Pay with Points, a collaboration between Mastercard and Xsolla, would likely be welcomed as an alternative payment method, as users could redeem credit card loyalty points for gaming purchases.

Xsolla offers extensive payment coverage in Africa, including local and global options that South African gamers know and trust. Accepting these payment methods will help boost your audience reach and overall game revenue. Here is a list of the region's preferred payment options and brands.

  • Visa - this is the preferred credit card in South Africa, with a 48.6% share
  • PayPal - First National Bank (FNB) account holders can easily make payments and withdrawals using their bank accounts; FNB has also made it possible for non-FNB account holders to withdraw funds paid into their PayPal account to their bank accounts at other banks
  • Ukash - this voucher-based payment system allows buyers to make online payments without needing a bank account or credit card
  • Ozow Pay by Bank - seamless payments for QR codes, eCommerce, e-billing, payment request links, point of sale, payouts, and refunds
  • Cell Pay Point - this easy-to-use online payment solution is not limited to credit card payments, as FNB's online banking clients can use this to pay merchants using their mobile phones
  • Zapper - this is a locally developed smartphone app launched in July 2014 that facilitates mobile payments
  • FlickPay - also launched in July 2014, this local company uses technology from wiGroup, a business that specializes in integrated point-of-sale mobile transactions

The gaming market in Kenya

The trend continues in Kenya, with its video game market experiencing rapid growth and development. With the introduction of broadband internet in 2009, a new generation of tech-savvy youth has emerged, contributing to a thriving game industry. In fact, Kenya has now emerged as one of the leading game hubs in Africa. Statista projects Kenyan gaming revenue to reach US$66.4M in 2023, and US$100.5M by 2027. 

The availability of high-speed internet access played a crucial role in this development. It fueled the expansion of gaming cafés and tournaments, catering to an increasing number of online players. These gaming venues have transformed the local gaming landscape and provided platforms for gamers to connect, compete, and showcase their skills.

The rapid expansion of the video game market in Kenya reflects the enthusiasm and potential for growth within the African gaming industry. As the sector continues to evolve and attract attention, it presents opportunities for talented individuals to pursue careers, create innovative games, and contribute to the overall development of the gaming ecosystem in Kenya.

Local and preferred payment methods in Kenya

As of 2022, cash remained the primary payment method used in online retail in Kenya, with 40% of the total share. Card payments came in at 25%, with most digital platforms accepting credit and debit cards in the country.

  • M-Pesa - this smartphone-based money transfer and microfinancing service allows those without a bank account to transfer funds by sending a text message; the "M" stands for mobile, and "Pesa" is Swahili for money

2023 is a great time to expand into the African gaming market

The future of gaming in Africa looks very promising. As the number of gamers in Africa grows, the games industry will become an increasingly important sector in African economies, potentially earning millions annually. Newzoo even projects that the Sub-Saharan African gaming market will generate over $1 billion in 2024. 

Nearly a third of gamers already pay for games, and as noted, African consumers are quick to adopt the ease and convenience of mobile payments. This is a great time if you're a game developer or publisher looking to enter the African gaming market. You can use Xsolla's Payments solution to accept various local payment methods and instantly build trust in your brand as you expand. 

To learn more about Xsolla’s extensive payment solutions, contact an expert from our team. Or create your account to start exploring Xsolla’s full offering of services for game developers.

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