Esports investment in Africa is increasing.

Over the last few years, the Esports market has grown at a breakneck speed. Total esports revenue increased from $493 million in 2016 to $655 million in 2017, and total revenue in 2018 is expected to exceed $900 million.

With a global audience of over 300 million followers and a market value of over a billion dollars, this sector includes devoted fans that follow their favorite gamers or people at any given time. Sponsorships and advertising make up the majority of this revenue, although media rights to streaming are steadily increasing, with Twitch and YouTube gaming being the most prominent participants in this market. Mixer, Microsoft’s newest streaming platform, is attempting to take up the space previously inhabited by those two behemoths. They recently signed two huge stars from Twitch, Ninja and Shroud, for exclusive streaming on their platforms.

Globally, esports investments are increasing, with over $4.5 billion invested in the industry in 2018. (Deloitte 2018). Traditional investors’ interest reflects the industry’s maturity and expanding popular appeal from an investor’s perspective. The esports ecosystem has a wide range of investment prospects in a variety of subsectors. Some elements specific to the business, such as team organization, while others, such as consumer items and event organizing, have similarities to other traditional industries and may be more appealing to first-time investors.

The African market is riddled with roadblocks that stymie the expansion of esports in general. From high data costs to infrastructural and electrical issues, there are a slew of issues. “We wanted to join global tournaments, but we couldn’t because you have to have a server in your region,” Youssef Mohsen, a professional player with Anubis Gaming in Cairo, Egypt, said in a phone interview. “The main issue we’ve run into is a lack of support from the publishers.” Many gaming events, such as The International 2017, which has a record-breaking prize pool of $24,687,919 for its annual Dota 2 tournament, are devoid of African competitors. This is due to a lack of game-specific servers, which are normally run by big game producers like Activision Blizzard, Valve, and Riot Games, which disqualifies the entire continent from international tournaments.

Despite these limits, the prospects are limitless because the continent represents a vast untapped reservoir of esports talent that will go to any length to compete on a global stage. The development of more advanced network infrastructure is critical to the growth of competitive gaming. Professional gamers in South Korea, for example, are treated as celebrities and participate in live tournaments in front of hundreds of thousands of spectators. This was made feasible by some of the world’s most modern fiber infrastructure. When it comes to gaming, having a fast and steady internet connection is crucial. Even a slight slowdown or interruption in service can have a significant impact on real-time multiplayer games.

Africa requires financial and infrastructure investments to compete on an equal footing with the rest of the globe. We’ll keep playing catch-up until that happens, which means we’ll miss out on the per-capita investments and revenue that esports delivers. However, the future appears brighter, since gaming groups are sprouting up all over Africa, steadily catching the attention of the world community. Kwesé Sports has partnered with ESL to deliver the world’s largest esports competitions to Africa later this year. As the African audience continues to increase, more publishers will be forced to invest in servers across the continent.

The focus of media platforms and advertising spending will have to be on fan engagement. This includes anything from ad agencies that help non-endemic brands achieve exposure in the industry to firms looking for new ways to engage viewers with the influencers and teams they watch on a regular basis through various streaming services.

The esports sector will see a rising number of people explore alternative methods to engage with the ecosystem, thanks to a young, active, and growing populace. The African market would have to develop new ways to engage its audience in a fresh and active manner. This would be fascinating to see, as media and advertising have experienced substantial expansion in recent years. In 2016, South Africa spent 1.2 billion dollars on television advertising; by 2018, that figure is predicted to rise to 1.32 billion dollars. At the same time, between 2016 and 2018, Kenyan television advertising spending is expected to increase from 341.7 million to 414 million dollars.

Finally, private equity investors will not be left out of the gold rush, as the global amount of private equity is increasing, ranging from direct investments to event coordination firms. As the role of event planners in the esports sector develops in importance and the scene becomes more competitive, coordinators are seeking for ways to stand out.


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