The gaming industry has evolved both culturally and technologically throughout the years, and this rate of development continues to accelerate even today. As games became more complicated and realistic, they moved from arcades to homes, computers, and mobile devices. The rise of the internet and mobile devices had a significant influence in transforming gaming into this intriguing monster of an industry. It continues to boom, both in terms of scope and revenue, as a result of factors including a progressively younger population, the widespread use of smartphones, reasonably priced internet, higher salaries, and social media. Gaming has grown more immersive, realistic, and entertaining because of cloud-based technologies, Artificial Intelligence-Machine Learning, Virtual Reality, Web3, and Blockchain technology. The Animation, Visual Effects, Gaming, and Comic (AVGC) sector in India has the potential to become the torch bearer for "Create in India" and "Brand India".
By 2025, India might hold 5% (US$ 40 billion) of the global market with a yearly growth rate of between 25 to 30% and the creation of more than 1,60,000 new jobs. The gaming sector is anticipated to grow by 30% annually, as one of the fastest-growing segments in media and entertainment by 2025 and the number of game users is anticipated to rise by 50% over the last year. With Gen Z being heavily influenced by e-sports, it is yet another gaming space that is rapidly growing. By 2025, India is anticipated to create more than 250 thousand employment opportunities and 2,000+ gaming enterprises.
Source: Kalaari Capital
Gaming Industry in India
The market for online gaming increased by 28% in 2021, reaching US$ 1.2 billion. This unprecedented rise is being driven by demographic trends, changes in media consumption habits, and industry advancements during the last few years. Additionally, the COVID-19 pandemic has sparked a long-lasting shift towards digital entertainment, which has caused the game industry to develop exponentially throughout the pandemic. India is anticipated to emerge as one of the world’s leading markets in the gaming industry. It has been continuously increasing in value over the previous five years and is anticipated to triple to US$ 3.9 billion by 2025. India is only behind China in terms of the total number of gamers. Most of the funding has gone to platforms for fantasy and real-money sports. The number of gaming studios receiving venture capital funding has increased. The surge in capital is a result of a few high-profile exits and increased awareness of monetisation potential. The gaming business is predicted to generate one lakh jobs by 2023 and 2.5 times that number by 2026. The sector is expected to grow by a factor of five times over the next 7 years, from US$ 857.81 million (Rs. 7,037 crore) in FY19 to US$ 1.74 billion (Rs. 14,300 crore) in FY22 and US$ 4.64 billion (Rs. 38,097 crore) in FY26.
Indian Gaming Landscape
It is a business structure in which consumers play games for real money in the hope of winning more than they initially paid. Example: Zupee, Winzo, etc.
Esports, commonly referred to as eSports, e-Sports, e-games, or electronic sports, is a kind of organised competitive video gaming. It primarily consists of teams fighting against each other in tournaments for financial prizes. Dota 2 is one of the most popular eSports games in India. Esports has attracted a great deal of interest in India, and gaming is quickly becoming a desirable and feasible professional path. By 2025, the number of Esports participants is anticipated to increase from 200 thousand to over 1.5 million.
Source: Kalaari Capital
In-app purchases in the Casual, Hyper-casual, and Midcore sectors are expanding at a 35-40% CAGR. The average non-RMG expenditure will have surpassed US$ 20 by 2025. Revenue from in-game advertising is expected to increase from US$ 300 million to over US$ 1 billion by 2030. India's contribution to global gaming income is expected to double from 1.5% to 3% by 2025, and 5% by 2030.
Time and Data Consumption
Presently 11% of the total smartphone time is spent on gaming and an average of 2GB of mobile data is consumed on gaming per month. Compared to other forms of entertainment like OTT and music streaming, Indians spend a greater percentage of their smartphone time playing games. Social engagement remains the most powerful incentive and method of discovering new games.
Key Stakeholders in Game Supply
They are responsible for the whole creation of a game, from the initial vision and concept through the final release of a playable version. For example, 99Games, etc.
They are responsible for overseeing the finance, production, marketing, distribution, and licencing of a game. For example, Nazara Games, etc.
The commercial intermediary serves as a commercial bridge between game developers and advertisers to facilitate revenue generation and reach. For example, Google AdSense, etc.
App markets, platforms, and marketplaces that host and distribute games across several channels (mobile, PC, console). For example, Google PlayStore, IOS App Store etc.
Key Areas of Opportunity
Indian developers have a unique chance to capitalise on our rich history and cultural heritage. Our mythical stories and characters can be readily converted into fascinating and exciting games in genres such as strategy and rogue-like that have the potential to reach a worldwide audience. It is critical to focus on developing culturally relevant and homegrown games that represent India's distinct personality since this will assist Indian game makers establish themselves in the global gaming market. Game content hooks for increasing relatability, interest, engagement, and long-term monetisation possibilities. Games that incorporate vernacular capabilities early in development have scalability potential across growing Tier 1/2/3 locations.
GameFi is a market area within the decentralised finance (DeFi) ecosystem that blends blockchain technology with elements of game theory to raise interest in a certain blockchain project and strengthen users' relationships with a specific cryptocurrency. Global cryptocurrency owners surpassed 300 million, and over US$ 6.5 billion in venture capital was invested in GameFi businesses. Blockchain stacks are still in development, but the feature advancements they give will improve user experience and ownership, ultimately leading to the formalisation of the black and grey gaming business, which is estimated to be worth more than US$ 12 billion globally.
Players spontaneously develop numerous communities in which they swap items, play together, make new friends, and achieve various game goals together. Games that encourage a 'social' experience have much higher discovery and retention rates across all user and game demographics. Gaming communities are intensely personal and exclusive. They are proving to be crucial for extending the life of a game and boosting its monetisation.
As Indian game creators grow, there is a chance for the emergence of technologies that ease and address development issues, as well as scale globally. Game dev Tools that focus on user acquisition, retention, gamer profiling, data mining, analytics, audience engagement, and personalization in the current context. GameFi Tools and platforms provide game creators to convert their existing games and libraries and enable FT/NFT/Crypto integration functionalities. They can provide an opportunity for the introduction of India's first 'game passes' and cloud platforms that distribute hefty game titles to Indians at a fraction of the cost.
These guidelines address the dual difficulties of catalysing and developing online gaming innovation while also protecting citizens from illegal online betting and wagering. Rules will serve as a drive for the greater invention while banning/prohibiting wagering on game outcomes and betting. The goal of these revisions is to require greater due diligence from online gaming and social media intermediaries in relation to online games and incorrect or misleading information relating to government business. The amended rules are as follows-
Bodies such as the Federation of Indian Fantasy Sports (FIFS), the E-Gaming Federation (EGF), and the All-India Gaming Federation (AIGF) are currently in charge of guaranteeing legal compliance and consumer protection in the online gaming business. These SROs have formed guiding principles that members must follow, such as compliance with national laws, information disclosure to users and transparent dealings, internet security, data protection, and safeguards to protect consumers from financial harm.