We study an active matter system comprised of magnetic microswimmers confined in a microfluidic channel and show that it exhibits a new type of self-organized behavior. Combining analytical techniques and Brownian dynamics simulations, we demonstrate how the interplay of nonequilibrium activity, external driving, and magnetic interactions leads to the condensation of swimmers at the center of the channel via a nonequilibrium phase transition that is formally akin to Bose-Einstein condensation. We find that the effective dynamics of the microswimmers can be mapped onto a diffusivity-edge problem, and use the mapping to build a generalized thermodynamic framework, which is verified by a parameter-free comparison with our simulations. Our work reveals how driven active matter has the potential to generate exotic classical nonequilibrium phases of matter with traits that are analogous to those observed in quantum systems.