[ENG] African Games Industry 2021 | A Chat with Jay Shapiro
Toleo la Kiswahili hapa
Even outside of the games industry discourse, Africa is not nearly discussed as much as it should. A continent blossoming into its own across so many dimensions has been dismissed too quickly by large countries and companies on economically ignorant grounds with questions like “do African consumers even have cell phones?” or “isn’t broadband connectivity nonexistent there?” It’s off-handed comments like this that prevent a region as rich as Africa from being discussed as optimistically as it deserves.
No one knows that better than Jay Shapiro, Founder and CEO of Usiku Games and serial entrepreneur. Shapiro, a fellow Canadian, has enjoyed an illustrious career so far. After completing his MBA at the National University of Singapore in Marketing, he founded BLUE in 1999, a digital marketing agency which after 8 years, and opening offices in London, NYC, Shanghai, Palo Alto and Tokyo (to name just a few cities), became the fourth largest digital media agency on the planet at the time. It’s no surprise WPP was eager to acquire the agency in 2007. After this Shapiro fled the South East Asian humidity and moved to New York City where he founded Appmakr over 8 years, a successful mobile app publisher, which he eventually sold to AppyPie in 2019.
His most recent adventure takes him to Nairobi, Kenya to found the Nairobi Game Development Center and Usiku Games. We’ll learn more about these ventures in a second. But first, I want to share the illuminating insights I had the pleasure of hearing from Jay on a recent video call. These findings fell into the following 4 buckets.
Africa as a continent
From Sports Betting to Video Gaming
Nurturing Game Dev Talent
On The Horizon
Africa as a Continent
Economic Indicators
Unlike other continents like Europe or North America, there is a temptation to paint Africa with a brush. To see it as a single monolithic geographical entity with no cultural or economic distinctions between its 54 countries and 2000 languages. Even a glance at economic and human development indicators like GDP or literacy rates can discredit this assumption and highlight where we’re seeing the most growth.
What this means is that when CNBC or The Economist refer to Africa they likely aren’t referring to the Somalia’s or Chad’s of the world but likely are looking at places like Nigeria, Kenya or Rwanda that are pumping out incredible YoY GDP growth numbers, spurring ahead in technology and education. Just know that if I refer to Africa as a collective in this piece it is for the sake of brevity so I don’t need to list all the thriving markets this continent houses.
A subtle and not necessarily glamorous indicator of how the African continent is economically successful is in their population pyramids. Africa is young, very young. Notice the pyramids below comparing Kenya vs China.
China & Kenya 2019 Population Pyramids
Kenya’s population pyramid suggests that a convincing plurality of young Kenyan’s will soon be entering their prime economically contributive years (Ages 22 - 60). They will have college degrees, disposable incomes, will start families, invest, and pay taxes. China is experiencing such a boom now with a large amount of their population in their economically contributive years. However in 20-30 years China will face a mass exodus. Its current workforce, hard at work, will age out and drain resources in the form of pensions, senior care and will generally consume fewer goods and services than their former selves.
If you’re curious about your own country’s population pyramid - check out this link!
The Next Billion
Beyond India and China, Africa is the only feasible answer to the increasingly burning question: “Where will the next billion consumers come from”. Within that billion, the hundreds of millions of young people in Africa, especially in key markets like Kenya, Nigeria, Ethiopia or Senegal will soon be fully fledged economic contributors with access to disposable income, sophisticated mobile payment solutions and phones that can play the latest mobile games. This is all facilitated by a 4G (and increasingly, 5G) mobile network that has comparable (and often better than) service quality to western carriers all at a severely discounted rate. Cloud computing coverage is also far from scarce, with Microsoft Azure and AWS servers cropping up all over the continent.
Learn more about Amazon’s Headquarters in South Africa
This beautiful cocktail of demographics, infrastructural development and foreign investment brews a bright future for Africa’s markets. So what about gaming?
From Sports Betting to Video Gaming
Status Quo
When Jay Shapiro came to Nairobi he noticed a billboard, then another, then another. All for the same sport betting service - SportPesa.
SportPesa is a sports betting company and is similar to many others in Kenya:
These companies are primarily Chinese or Maltese owned meaning money is flowing out of African not in.
1M+ Daily Active users placing on average 3+ bets a day
Average bet value is $ < 1 USD
Mostly slum dwellers who would lose a ton, frequently or would win very little infrequently
Some back of the napkin math shows that 1 USD x 3 Bets a day x 1M DAU’s = $3m USD in betting traffic daily for SportPesa alone. No surprise that the overall Kenyan sports betting industry was valued at $37Bn in 2013.
It’s staggering numbers like this that illuminate a simple fact - consumers in developed African markets are already accustomed to games on their phones. To no one’s surprise, the thrill of the game exists whether you’re in Manhattan or in a Kenyan slum. The dopaminergic feedback loop of playing games is fundamentally human, culturally agnostic and as such, Chinese and Maltese companies have found a way to monetize that in the form of apps like SportPesa.
An Opportunity
So gaming has a rich presence in places like Kenya, albeit in the form of sports betting. But what could the African game’s industry’s renaissance look like? How does it escape the “bottom of the brain stem” late stage capitalism of predatory sports betting and flourish into a self sustaining industry where games are made for Africans, by Africans? How can mobile-enabled, young consumers, enjoy games based on skill, not chance, that promote something positive? Enter Usiku Games.
Usiku Games
Their website proudly lays out 4 tenants that inform their game design philosophy:
#1 Relevant and reflective of African life and culture.
“It was important to to us to have locally generated content to the region” - Jay Shapiro
Similar to Shapiro’s frustrations around Africa being painted as a continent - having locally authentic representative game worlds will only help drive engagement when players can relate to the environments they are interacting with.
#2 Non-Violent - There are no guns in any of our games
“There are enough guns in the world, especially in Africa.” ~Jay Shapiro
The shooter market is no doubt saturated, it has been for the better part of 2 decades. Despite the roaring success of shooters, especially on mobile, like Fortnite, Call of Duty Mobile, and the recently announced Apex Legends Mobile, it’s likely the toughest market to get into, ethics aside.
#3 Gender Inclusive - Globally more women play mobile games than men
Despite the #1 game in Africa being sports betting, 90% of its players are male.
Reconciling that with the fact that globally, 65% of mobile game players are female there is a clear market opportunity to make games attractive to females.
#4 Educational - Either through cognitive reasoning, or specific topics
The intersection between education and games is a fascinating one and this design decision potentially may find opportunities for Usiku Games to find their way into a classroom one day!
Game Localization
For those unfamiliar, games localization is the process of adjusting a game so that it can launch in markets that speak different languages. For example, Nintendo may create a Legend of Zelda game in Kyoto, Japan but it will be sent to teams in Redmond, Washington to translate the game text into English, replace any niche cultural references or in some cases remove certain parts of the game that may be deemed inappropriate for the western market.
It’s stories like this that show that localization transcends beyond what we typically think. It’s not just the game language or its references, it is about, at a fundamental level, how the game chooses to communicate with the player.
Shapiro believes this nuance extends past game design and applies to monetization citing 92% of people in Africa are on pre-paid phone plans, not post paid like those in the west. When it comes to migrating new ways to pay for games (e.g. Xbox Games Pass), companies will need to very delicate and conscious about the cultures expectations to purchasing services.
Nurturing Game Dev Talent
All good games start from the people and teams creating them. It’s one thing for games not made in Africa to see play, as we saw we the Chinese and Maltese owned sports betting sites but it’s another thing entirely to cultivate an ecosystem where local game dev talent can thrive in Africa. Let’s see it as “Give a man a fish/game vs Teach a man how to fish/make games”.
Nairobi Games Center
This is why Shapiro created the Nairobi Games Center. Call it a WeWork but for Nairobi based game devs. A heavily subsidized co-working space that offers its members state of the art technologies such as latest consoles, a VR Lab, and even a Motion Capture Studio to create their dream games.
The ultimate goal is to cultivate the conditions for game development to thrive within Kenya. Not necessarily by developing a colossal publishing business with global distribution channels or even having IP ownership of the games made within the co-working space (Shapiro assures us that Usiku takes no equity stakes in the developers projects) but rather by giving modern game dev tools to the really brilliant game devs tucked away in places all over Africa. People who have dreams of creating games and don’t have access to the necessary tools but sure as hell have the brains and competency.
In a lot of ways, what Shapiro is trying to do is similar to his stint in Singapore. Back then he didn’t set out to create the largest Digital Marketing Agency in South East Asia. He wanted to create the industry of Digital Marketing in the first place and the benefits organically revealed themselves from that goal.
So what’s in it for Shapiro and Usiku Games? Beyond fulfilling the dreams of countless Kenyan’s who want their worlds to have more games. Practically speaking, Usiku begins to cement themselves as a gatekeeper to the African continent. When a Microsoft or Sony want to invest in a growing market like Kenya, they will have to go through Jay and his team.
It’s no surprise that when Phil Spencer [Head of Gaming at Microsoft] visits Nairobi, which he has multiple times pre-COVID, he and Shapiro end up having talks. In the same spirit as the Nairobi Games Centre, Microsoft is investing further in open source training which includes Microsoft Azure Cloud.
On the Horizon
America
Creating a self-sufficient ecosystem of African companies developing and publishing games is a required ingredient for its markets to blossom into their own. But a little foreign investment never hurt anyone. What could that look like and where would it come from?
COVID has affected the financial performance of publicly traded gaming companies in 2 ways.
On the bright side, gaming engagement has never been higher thanks to lock downs across the globe. More people are playing more games for longer and spending more money on them.
The downside to this is the precedent it sets. How can the likes of Electronic Arts or Activision Blizzard hope to keep this momentum going as the world slowly drifts back to “normal”, whatever that looks like? How will they be able to deliver the double digit growth that their shareholders have expected this past fiscal year? Shapiro believes Africa is the answer to that question. If the demand in western, European or Asian markets decelerate post COVID, large publishers may need to market their titles in African markets, build games for lower spec hardware or acquire African studios to ensure they are crafting culturally authentic games.
China
As mentioned above, the 4G infrastructure spanning Africa is quite developed and affordable, but what’s Africa’s plan for 5G? Chinese tech companies. Specifically our friends at the Chinese telecom and consumer electronics company, Huawei, who sees Africa as a case study, an opportunity to blanket the continent in low-cost, high speed mobile connectivity. It isn’t an easy road as the company’s privacy concerns around the risk of abusive facial identification software or geo-location tracking ruffle the feathers of African governments.
Check out this really interesting interactive map to better understands Chinese foreign investment!
Beyond infrastructural investment, Shapiro is expecting more boots on the ground from companies like Tencent. Regional offices and aggressive hiring could be in the cards for more developed African cities. Similar to the ethos of the Nairobi Games Center, I see this as a fundamentally good thing. Providing high quality, very well paid technology jobs to Africans will be a nice extension to the strong relationship Africa and China have in the post-secondary world. I wouldn’t be surprised if African natives who left to China for university return after graduation to end up working for a Chinese tech company like Tencent, Baidu or Alibaba.
China surpasses western government African university scholarships
Operating Systems
The beneficial effects of the “feature phone” have been sweeping the world for quite some time. For those unfamiliar: A feature phone is a type of mobile phone that has more features than a standard cellphone but is not equivalent to a smartphone. Feature phones can make and receive calls, send text messages and provide some of the advanced features found on a smartphone such as internet connectivity. They have been a godsend to developing markets, providing their citizens a safe, affordable way to access the internet on the go.
Shapiro introduced me to an extension on the feature phone idea that really blew me away - something called KaiOS. See below for a quick video summary:
KaiOS has swept APAC in recent years (on over 150M devices in India alone) with a large portion of their operations coming out of Hong Kong. These are fully kitted devices, not feature phones, at a fraction of the cost (~$20 USD per device). The OS runs on over 51 devices. KaiOS grants access to the Kai Store, a mobile app store akin to Google Play or Apple App store housing an impressive portfolio of apps like Facebook, Youtube and WhatsApp.
An important nuance is that KaiOS is HTML 5 based, which allows for low-intensity but still impressively functional gaming. It’s the reason why Usiku games develops their games only with HTML 5 in an effort to meet their players on the devices they own (or will own soon).
For a quick crash course on HTML 5 - see below!
In Closing
This was my favorite piece to write.
Learning how Africa, a place even I am guilty of economically stereotyping at times, is growing in so many fantastic ways beyond just in the games space is such a source of hope. Of course I’m jazzed about the strides in its regional demographics, game trends, hardware, software, foreign investment, education and so much more. But there’s something else. Something more abstract that I find appealing - cheesiness incoming!
The note that people’s love for games is so culturally agnostic but also so culturally informed at the same time is a testament to how both universal and personal games can be. The fact that the backbone of such a broadly loved game like 2048 will work in Africa is great. The fact that it needs to be changed to really appeal to the regions’ players is even better. It speaks to how everyone is the same in their love of games, and also different in how they relate to it - and that’s just from the perspective of a game player.
On the development side, the fact that a 16 year old in Senegal plugging away at the Unity Game Engine, as I did with friends from the comfort of my Vancouver apartment, is using the same tools, encountering the same frustrating bugs and has similar, but also very different, dreams of the game he or she wants to make is a galvanizing idea.
I’m glad I had the privilege of chatting with Jay Shapiro, a true pioneer of the African games industry, who has helped democratize game development access and is working to bring its magic into every corner of Africa.
If you want to follow what Jay Shapiro is up to, check out his recent Racket where he talks about all things related to the African games industry!
If you want to follow Usiku Games, check out their social links below!