PremiumNew Delhi: The online gaming industry is expected to grow at a compound annual growth rate (CAGR) of 40% to $2.8 billion by 2022, up from $1.1 billion in 2019, according to a Deloitte India report released on Tuesday. Largely driven by smartphones, affordable data and increasing disposable income, the rapid growth is expected to strengthen the sector’s share of total media and entertainment industry by 4−5%.
The findings of the study highlighted that covid-19 has pushed the growth further as users latched on to online gaming platforms in absence of entertainment options during lockdown. The time spent on gaming apps, increased by 21% during the initial national lockdown, with the total customer base crossing 300 million users. While the arrival of vaccines and resumption of economic activities may result in a levelling off or even decline in the average time spent on video gaming, the industry would already be in a higher gear.
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India is one of the top five mobile gaming markets in the world, with a 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 providing opportunities to monetize their passion.
“The forecast for the online gaming industry in India in terms of revenue is also bright. The Deloitte report suggests the same. Furthermore, the Indian gaming industry has been growing exponentially and can generate substantial revenues, create jobs, ensure responsible gaming and also curb and eliminate illegal activities, like match-fixing and money laundering, if brought under formal regulation and taxed rationally," he noted.
The report said that the business model of gaming platforms has also transitioned. Gaming firms are gradually moving from a model dependent on download volumes and advertisements to one with diversified revenue streams built on consumer engagement and elevated experience levels. In-game revenue streams, such as chargeable expansion packs or virtual coin packs as well as subscriptions, are gradually picking pace.
To be sure, Indian gaming platforms have attracted more than $450 million in the last six years. Some recent investments include those in Mobile Premier League, that raised $90 million in 2020 from Pegasus Tech Ventures and others, JetSynthesys (raised $40 million from DSG, Jetline, and Triveni Engineering & Industries) and Reliance Jio that invested in mobile gaming startup Krikey among others.
In terms of gaming segments, real money gaming (RMG) is expected to grow at a CAGR of 40% from 2020−22. Key trend in this segment includes growing support for games such as poker and rummy (which are likely to be recognized as games of skill and thus legalized) that will lead to greater adoption among new users. E-sports revenue is expected to rise at a CAGR of 36% over the next three years. The findings of the report said that gamers spend more time watching other people play video games than they do watching traditional sports on TV. An Indian gamer spends, on an average, 3.6 hours per week in watching e-sport tournaments. Meanwhile, fantasy sports revenue increased nine times in the pre-pandemic years between 2017−18 and 2019−20, reaching ₹16,500 crore.
The report also stated that policy-level employment-related initiatives by the government would ensure any gaps in the talent pool are filled and enable the industry to reach closer to its potential.
Noting that the online gaming industry is self-regulated, and governed by comprehensive charters and audits, Roland Landers, chief executive at All India Gaming Federation, emphasized the need to regularize the sector. ".....it has become important that the industry’s self-regulation practices should be recognized by the relevant ministries and they should seek to devise a regulatory framework in consultation with the industry stakeholders. This will boost investments leading to technological advancements as well as additional revenues to the exchequer. The gaming industry can generate massive employment, through direct and indirect jobs from ancillary sectors such as telecommunications, marketing, financial services and banking, technology, events, and real estate," he added.
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