A report by Ernst and Young (EY) on the Indian online gaming sector revealed that the number of gamers in India has now reached 42.5 crore, second only to China. The report states that the industry holds the potential to boost Foreign Direct Investment (FDI) inflows, employment, and investments in various sectors.
The online gaming sector, as per the report, has also helped ancillary industries such as fintech, cloud services, data analytics, and cybersecurity to grow, making them even more viable and thus creating a dynamic between each other.
Since FY20, the online gaming segment has witnessed growth at 28% CAGR, bringing the market size to Rs 16,428 crore in FY23. This is further estimated to reach Rs 33,243 crore by FY28, with a 15% CAGR. The sector has also created over 1 lakh jobs, with over 1.5 lakh more estimated by the end of 2025.
The real money gaming sector (RMG), as a sub-segment of the online gaming industry alone, is noted as comprising 82.8% of the market share, with over 400 RMG start-ups in the country as of FY23. The estimated tax contribution of the RMG sector alone is estimated to be around Rs 6,500-6,800 crore as direct tax revenue during FY24−28 and Rs 75,000-76,000 crore as indirect tax revenue during the same period.
The report also calls the Intermediary Guidelines and Digital Media Ethics Code Rules, 2021 for online gaming by MeitY a progressive step towards removing current ambiguity in the sector while also providing scope to attract funding and encourage innovations.
However, the GST Council earlier this year, decided to implement 28% GST rate on full face value on online real money gaming. As a consequence of the decision, it is expected the RMG sub-segment of the industry will deliver lower growth as compared to when the GST rate was 18%.