Budget 2022: Govt to set up a task force to boost the gaming sector

Published on:

Finance Minister Nirmala Sitharaman in her budget speech announced the setting up a task force comprising of industry stakeholders to boost the animation, visual effects, gaming, and comics (AVGC) sector. The minister said AVGC offers immense potential to employ youth. The task force will recommend ways to realize the employment potential and build domestic capacity for serving our markets and the global demand. The announcement was welcomed by industry leaders and experts.

Gaming – A sunrise sector

In June last year, KPMG said that the Indian gaming user base will grow from 433 million to 657 million in the financial year 2025. The market size of gaming in the country was also projected to move forward to Rs. 29,000 crore in 2025 from Rs. 13,600 crore in the financial year 2021. This is evident from the fact that India had the highest game downloads in the casual mobile gaming sub-segment in the world (excluding China) in 2020, with Q1-Q3 2020 downloads standing at 7.3 billion, accounting for 17 percent of the global mobile game downloads. Further, the monthly active users for the top 100 mobile games and the time spent on online gaming, are higher by 10-15 percent post lockdown 2020, indicating the establishment of a new normal.

Krafton, the makers of popular PUBG has set up a local company last year and have invested in Indian startups. The South Korean company last year released Battlegrounds Mobile India (BGMI) as the Indian avatar of PUBG Mobile — following the ban of the original title by the government amid border clashes with China.

Manish Agarwal, CEO of Mumbai-based mobile gaming and entertainment company Nazara Technologies, agreed to the government’s objective and said that the task force would facilitate employment for the youth. “India presently commands around 10 percent of the global AVGC market and has the potential to reach 20–25 percent by 2027,” he was quoted on Indian Express. Nazara Technologies is India’s first real money gaming company listed on public markets.

A report by consulting firm RedSeer in October projected that the gaming market in the country will grow at a compound annual growth rate (CAGR) of 30 percent to reach $7 billion in the next five years. “The Indian gaming landscape provides great opportunities to build games for Indian and global players. Hence, the idea of looking within to build domestic capacity for serving our markets and global demands is a good move to boost the talent pool and content creation,” Mr. Vishal Gondal, Founder of game development and publishing company nCore Games was quoted in media reports. nCore Games is the maker of FAU-G, a battle royale game. The Bengaluru company recently raised $10 million and announced plans to soon launch web3 offerings.

The decision to set up an AVGC task force comes as a welcome move for the industry that is filled with the potential to create massive opportunities for India’s youth. The steps announced to build a domestic capacity for the gaming sector will fuel the industry’s capabilities as a major employment generator and a sunrise sector. Further, the decision to extend tax incentives for startups only builds up our hopes for the startups in online fantasy sports sector,” Mr. Anwar Shirpurwala, CEO, Federation of Indian Fantasy Sports (FIFS) – India’s only self-regulatory body for fantasy sports, was quoted on Times Now.

In an RTI response last June, the Prime Minister’s Office (PMO) has indicated that the ‘Draft Guiding Principles for the Uniform National-level Regulation of Online Fantasy Sports Platforms in India’ released by the NITI Aayog in December 2020 as well as the need for a central regulatory framework for online gaming in India may be deliberated upon by the Council of Ministers.