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India’s online gaming industry is expected to grow at a compound annual growth rate (CAGR) of 40% to reach $2.8 billion by 2022, up from $1.1 billion in 2019, according to a Deloitte India report released on Tuesday.

The rapid growth, driven by smartphones, affordable data, and higher disposable income, is likely to strengthen the sector’s share of media and entertainment industry by 4−5%.

Gaming gained prominence during the lockdown months, given the dearth of entertainment options, the study found. Time spent on gaming apps increased by 21% during the initial national lockdown, with the total customer base crossing 300 million.

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The arrival of vaccines and resumption of economic activity may result in a levelling off or even decline in the average time spent on video gaming, but the industry has already moved to a high gear.

India is one of the top five mobile gaming markets in the world, with 13% share of global game sessions, and is expected to add 40 million online gamers during 2020−22.

Pranav Bagai, CEO and co-founder of Poker Sports League, said that increased internet penetration, 5G network, and broadband proliferation will revolutionize the gaming sector, with more people joining online gaming cohorts and a rise of game streaming, thus providing opportunities to monetize their passion.

Business models have changed as well, as gaming firms gradually move from a model dependent on download volumes and advertisements to one with diversified revenue streams built on consumer engagement and elevated experience levels, the report said. In-game revenue streams, such as chargeable expansion packs or virtual coin packs, as well as subscriptions, are picking up pace. Indian gaming platforms have attracted more than $450 million in the last six years.

In terms of gaming segments, real money gaming (RMG) is expected to grow at a CAGR of 40% from 2020−22. A key trend in this segment is the growing support for games such as poker and rummy, which are likely to be recognized as games of skill and thus legalized in certain states in the country. E-sports revenue is expected to rise at a CAGR of 36% over the next three years.

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