Mobile gaming has been growing rapidly in India in recent years, with millions of players coming online year after year. While the sector is faced by legal uncertainty and border tensions with China, that has not stopped the private equity money from flowing into this sunrise sector. The sector has also seen new sector-specific venture funds like Lukimai, Griffin Gaming.
The user growth, especially after the Covid19 has not only led to increased revenues for gaming companies but has also had a significant impact on the Indian economy. The number of online gamers and online gaming in India has seen a exponential rise in the country, with games downloaded at 7.3 billion in the year 2020 alone, according to skill gaming body AIGF.
India crossed half a billion gamers in FY22, up from 450 Mn the year prior, second only to China in the number of online gamers. As of 2021, 80% of the $1.5 billion generated by mobile gaming came from in-app purchases and real-money game (RMG) spends, according to a BCG-Sequoia report.
According to a report by venture fund Lukimai, the sector is projected to reach $8.6 Bn in FY27. RMG revenues currently constitute 57% of market size but future growth is projected to be driven by in-app purchases growing at a 34% CAGR.
According to a another report by KPMG India and the Indian Federation of Sports Gaming (IFSG), the online gaming industry in India employs approximately 40,000 people directly and indirectly. This number is expected to grow to 100,000 by 2025, with the growth of the industry. The Government in December 2022 has said that the Animation, Visual Effects, Gaming and Comic (AVGC) sector has the potential to provide employment to over 20 lakh people in the coming 10 years.
Most gamers play online games as an escapism to day-to-day chores, and this has provided an opportunity for virtual products including those that offer virtual avatars. Products that offer user to adopt avatars and lead a life in virtual worlds they could only imagine in real life are gaining adoption. This could be one of the most important use cases for the metaverse in India and a report by EY-FICCI estimates over 50 million avatars to be created by 2025, leading to an vast commerce opportunity. With the penetration of eSports, gaming related intellectual property including merchandise, apparels have become a burgeoning sector itself.
Online gaming has emerged as a significant contributor to the Indian economy in recent years, with its contribution to the employment creation in the IT/ITES sector, recreation and leisure facilities. As incidence to adoption of online gaming, significant investment will be seen in the information technology sector in the form of data centers, research and development activities, and other support facilities.
As the industry evolves, it will be interesting to see how it contributes to the broader Indian entertainment industry and its role in driving innovation and creativity in the country.