Netflix’s withdrawal symptoms, and Africa’s $10 billion gaming industry 🕹️
Netflix slows down on original content, Africa’s gaming industry to hit $10.81 billion within the next decade, and how to invest in Africa’s creative industry.
Hello there!
We are officially in that part of the year where doing work requires digging extra deep for motivation. But before we bow out, here are some of the most interesting things happening across Africa’s media and creative ecosystems.
In today’s Digest, we discuss:
How Netflix is scaling back globally, not just in Nigeria
The opportunities in Africa’s gaming market
The best way to invest in Africa’s creative industry
Center Spread 🗞️
Netflix scales back Nigerian originals
Last week, speculation swelled that Netflix was exiting Nigeria, sparked by comments from Nigerian filmmaker Kunle Afolayan at the 2024 Zuma International Film Festival. While the global streaming giant denied the reports, local filmmakers and industry insiders confirmed that Netflix was indeed cutting down on original productions in the country—a move that may be tied to a broader global shift to focus on quality over quantity as the streaming market course-corrects after the pandemic-era boom.
In 2023, Netflix cut over 130 original productions—a 16% reduction in its output compared to 2022. This marked the first decline in the company’s original programming output since its foray into streaming. According to Netflix, the shift aims to prioritize “better quality over quantity,” with the company focusing on producing standout content rather than saturating the market.
This strategic adjustment comes as streaming platforms face mounting economic pressures. For Netflix, declining global viewership in 2023—down by more than 7 billion hours compared to 2022—and rising production costs have necessitated tighter content curation. These challenges are compounded in Nigeria, where inflation and currency devaluation have eroded consumer spending power, making Netflix’s ₦7,000 ($4) monthly subscription a luxury for many. Stiff competition from local platforms like Showmax, which offers more affordable subscription options tailored to the market, further complicates matters.
Since entering the Nigerian market in 2016 with its first original, Lionheart, Netflix has invested over $23 million in local productions. Its success has come from partnerships with Anakle Films, Kunle Afolayan Productions, and EbonyLife Productions. However, this represents just a small part of Netflix’s African investment. Between 2016 and 2022, the streamer invested $175 million on the continent, with South Africa securing 71% or $125 million of those funds.
Netflix appears to be moving towards licensing content with proven local traction rather than commissioning original productions. This strategy will allow the streamer to secure a higher caliber of content from the Nigerian film industry at a lower cost.
The $10 billion gaming industry
Africa’s gaming industry is poised for extraordinary growth, with market projections showing an increase from $2.16 billion in 2024 to $10.81 billion by 2033, according to a new report from Astute Analytica. This growth, representing a compound annual growth rate (CAGR) of 19.96%, is driven by mobile technology, a youthful population, and increasing internet access.
With nearly 200 million gamers recorded in 2023, the continent has become a significant player in the global gaming ecosystem. South Africa leads the rest of the continent with an annual gaming revenue of $290 million, followed by Nigeria, Ghana, and Kenya.
Mobile gaming dominates the African market, accounting for 60% of all gaming activity. This dominance is supported by the continent’s 650 million mobile phone users, with 40 million new mobile internet users coming online in 2023 alone. Smartphones’ accessibility has made gaming more attainable for millions of Africans, particularly through free-to-play models that remove financial barriers to entry.
Popular titles like PUBG Mobile and Call of Duty Mobile have attracted millions of players, with in-game purchases generating over $700 million in revenue this year.
Local game development is also flourishing, with studios like Kucheza, Kagiso Interactive, and Nyamakop creating culturally relevant content. Success stories include Whot King by Maliyo Games, which has 3 million downloads. This trend toward local content creation addresses a significant market gap, as 56% of African gamers are unaware of any games made in Africa despite expressing a strong interest in culturally relevant content.
The Esports scene is also gaining momentum, with events like the African Esports Championship drawing over 100,000 participants and millions of viewers. Sports games, particularly football titles like FIFA 23, which sold 1.5 million copies in Africa, remain popular.
Despite these positive trends, the industry faces notable challenges, including limited access to traditional banking systems and infrastructure constraints. Developing innovative solutions to these problems will be important to sustaining the industry’s growth over the next decade.
Crunch Time 📈
Strategies for investing in Africa’s creative industry
Africa’s creative economy is attracting significant investment, with its music, film, and gaming sectors receiving substantial funding. Universal Music Group’s acquisition of Mavin Global earlier in the year highlights the industry’s potential. Over the last five years, Mavin’s valuation soared from $9.5 million in 2019—when Kupanda Capital and TPG Growth invested in the company. This investment allowed the record label to capitalize on Afrobeats’ global popularity.
Mavin’s success can partly be attributed to the hands-on operational approach Kupanda Capital took with the record label, helping level up its operations in line with global best practices. In Communiqué 50, we explore what made Kupanda’s investment in Mavin so successful and other strategies for investing in Africa’s creative industry.
Curiosity Cabinet 🗄️
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