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Gaming booms – but SA missing out

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The global gaming industry is booming, with harware and software sales in the US alone running at $1,7-billion – a massive 57% increase from last year. Analysts at PricewaterhouseCoopers expect revenue from the gaming industry to hit $54,6-billion in 2009.

The NPD group shows that the bulk of these US figures are made up from $946-million sales worth of video game software, $551,3 million hardware sales, and the sales of video game accessories worth $220-million, which is an increase of 58% from the same month the year before.
Due to the current worldwide economic downturn these figures may be surprising to some, but what they do prove is that while many sectors of the economy appear to be slowing, there is still room for growth in the gaming industry. In fact a study written by Robert Crandall and J. Gregory Sidak estimates that video-game sales will grow to $15-billion by 2010, and employment within the industry will leap nearly 75% to a quarter of a million.
According to Danny Day, chief executive of QCF Design, the bad news for South Africa is that "although there is huge earning potential within the industry, the South African gaming industry is not yet ready to compete globally.
"There is a severe lack of financial support from South African banks when it comes to the game design business, and subsequently we are losing talented individuals to overseas markets.
"On the up side however the South African gaming market seems to be experiencing a surge as more people are becoming interested in using games in innovative ways, for example educational purposes. Thanks to events like rAge people are becoming aware of the gaming industry, meaning big business is becoming more receptive to supporting it."
An upcoming PricewaterhouseCoopers report expects the video-game industry to show a compound annual growth rate of 10,3%.
According to the report console games, which are the largest category, will grow by 6,9% annually, while online and wireless games are expected to have the fastest rate of growth, at 16,9% and 19% respectively.
The report does, however, show one area which will decline – PC game sales are expected to decline by 1,2% a year. The report suggests several factors which will influence video-game industry growth, one of which is mobile phones with improved graphics and gaming capabilities becoming more popular.
This expected increase in popularity of gaming on mobile phones is documented in the Digital Lifestyle Predictor, a study conducted by BMI-TechKnowledge into the digital lifestyles of South African consumers and whose aim is to provide new depths of insight into consumer digital trends.
According to Ryan Smit, BMI-TechKnowledge analyst, "the study found that amongst consumers in households with at least R8000 income, MXit has almost double the usage of Facebook.
"This is believed to be driven by the low penetration of computers relative to a high penetration of cell phones in the market. More than half of IM [internet mobile] users in the 16-24 age bracket use IM every day and mobile IM has more than doubled in usage in the past 12 months, the majority of which is believed to be on the MXit platform."
rAge will take place in Johannesburg from 3 to 5 October.