A report by gaming and interactive media venture fund Lumikai has revealed that about one-fourth of Indian gamers in the financial year 2022 (FY22) were paying customers showing how the sector has risen to be the second-largest internet market in the world.
According to the report, India had 120 million paying users in FY22, with two million new paid customers coming onboard every month. The total number of gamers surpassed the important milestone of 500 million in FY22, up from 450 million in FY21.
The report also mentioned that the average revenue per paying user increased by 11% to $20 annually in FY22. New material, better in-game stuff to buy, and the possibility of earning money were important motivators.
Founding General Partner of Lumikai, Justin Shriram Keeling, said, “India’s gaming industry this year hit major inflection points, registering strong growth across the board. Industry growth is expected to be fuelled by a rapidly increasing gamer base, higher conversion to paid users, and increasing sophistication of Indian gamers.”
With over 15 billion downloads of video games in FY22, India is one of the largest markets in the world. According to the report, 358 million users have actively played the top 10 mobile games in India on a monthly basis in FY22.
When it comes to the category contributing the most revenue it is real-money games. Around 57 percent of the total industry earnings come from them as they remain the industry’s important revenue generator.
The top games like Free Fire, Battlegrounds Mobile India (BGMI), Genshin Impact, and Call of Duty Mobile were played nearly double compared to casual games such as Candy Crush Saga, Coin Master, and Royal Match, among others.
Free Fire and BGMI were, however, banned by the Indian government this year.
Salone Sehgal, Founding General Partner of Lumikai, said, “The last 28 months have been watershed years in terms of attracting VC investment of over $2.6 billion in the Indian gaming landscape.”
“Sustained capital investment and liquidity outcomes in the form of strategic exits valuing $750M+, multiple unicorns, and a publicly traded company have heightened the interests of entrepreneurs and investors alike. This sustained momentum should further drive entrepreneurial ambition and innovation in the Indian gaming industry,” she added.
With almost 30% of the 450 Indian Web3 companies operating in the gaming industry, Web3 has also become a popular and strategically important technology in the industry, according to the report.
In the wake of the expanding use of blockchain, several local businesses, including Dream Sports, the parent company of Dream11, Nazara Technologies, nCore Games, and Tegro, are eyeing the Web3 gaming market. According to the founders, Web3 gaming may offer better prospects for Indian game makers to monetize their work.