Africa's gaming market is expected to top $1 billion in 2024 — in the face of a global slowdown

Africa's video game market is having a moment.

Sub-Saharan Africa's gaming industry is expected to generate over $1 billion for the first time in 2024, according to data shared exclusively with CNBC.

The figures, which were compiled by Dutch research firm Newzoo for African gaming startup Carry1st, suggest a buoyant market for gaming in Africa, where economic growth has been sluggish as the region grapples with lingering inflation, tough financial conditions and high net debt.

Sub-Saharan Africa's economic growth rate dipped to 3.6% in 2022 from 4.1% in 2021, according to the World Bank. And it is forecast to fall further in 2023, to 3.1%.

Despite that, Africa's video game market has been doing well. In 2022, games sold in the region generated $862.8 million in revenue, up 8.7% year over year, according to Newzoo's data.

That's in defiance of a broader contraction in video game activity globally, as the tailwind of Covid lockdowns wears off and a higher cost of living has forced consumers to tighten their belts.

The global games market generated $182.9 billion of revenue in 2022, down 5.1% from 2021, according to Newzoo.

Cordel Robbin-Coker, CEO of Carry1st, which is headquartered in Cape Town , said the most notable thing about the data is the "underlying secular growth in the games market in sub-Saharan Africa."

"Looking back, we know that Covid was a significant contributor," Robbin-Coker said. "But now that those benefits have receded, we're starting to see growth slow and even decline in other markets."

"We have the fastest-growing population in the world," he added. "People are coming online for the first time at a really rapid pace. Most of that – over 90% – is via mobile phone. There's really strong appetite for content."

Venture capital firm Konvoy, which focuses on gaming-related investments, said it sees Africa's gaming industry growing 15.7% in 2023 and 13.6% the following year, higher than previous projections of 9.23% and 8.95% growth.

"These initial numbers for gaming on the continent are promising, but the longer-term trends of population growth, internet penetration, and smartphone adoption paint a picture of incredible growth for gaming on the continent," Jackson Vaughan, managing partner at Konvoy, told CNBC.

Adoption of smartphones, in particular, has boosted Africa's gaming prospects. A higher-than-normal young population in the region means digital technology has been strongly embraced.

By 2030, 87% of the population in sub-Saharan Africa will own a smartphone, according to mobile industry body GSMA, up from 51% in 2022.

The global gaming industry is expected to return to growth this year, with analytics firm Ampere Analysis forecasting it will increase by 3.3% in 2023, driven by mobile gaming "returning to some form."

But it's a far cry from the blistering growth of 2020 and 2021, when the coronavirus pandemic forced people inside their homes and allowed people to spend more of their spare time playing games.

"The potential of disruption to user acquisition from future platform privacy changes, plus a broader audience less resilient to changing macroeconomic conditions, means that mobile gaming market performance has become less predictable than in the past," said Louise Shorthouse, analyst at Ampere Analysis.

In Africa, much of the growth in games was driven by smartphone usage.

According to Newzoo, mobile gaming generated $778.6 million in revenue in 2022, accounting for about 90% of total game sales.

Nigeria led the way in total annual gaming revenue, attracting $249 million, followed by South Africa, which generated $236 million in revenue.

South Africa was previously Africa's largest video gaming market, according to Newzoo.

The next highest-revenue-generating countries were Kenya ($46 million), Ethiopia ($42 million), and Ghana ($34 million).

Ethiopia recorded the highest year-over-year growth – 13% – while Uganda was the slowest-growing games market, increasing only 6%.

Nigeria and South Africa contributed two times the revenue of the other eight top countries combined, according to Newzoo. All 10 of the countries had year-over-year sales growth.