India's online gaming market grew by 23% in FY24: Report

India's gaming market grew 23% YoY to US$ 3.8 billion in revenue in 2023-24 (FY24), despite the 28% Goods and Services Tax (GST) imposed on online gaming, according to a report by gaming-focused venture capital firm Lumikai. The market is expected to exceed US$ 9.2 billion by FY29, growing at a five-year compound annual growth rate (CAGR) of 20%. Real-money gaming (RMG) remains the largest revenue driver, contributing US$ 2.4 billion. However, in-app purchases were the fastest-growing segment, up 41% YoY in FY24. By FY29, in-app purchases, with a CAGR of 44%, are projected to surpass RMG revenues.

The shift towards non-RMG games, such as casual and mid-core games, continues, with gamers increasingly motivated by recreation rather than winning money. Mid-core games saw 53% YoY growth, while casual games grew by 10% in in-app purchase revenue. Despite global ad-spend pullbacks, ad revenue remained stable. Casual and mid-core games mainly generate revenue through in-app purchases, while RMG requires monetary deposits. RMG firms added US$ 400 million in FY24, absorbing much of the GST burden. However, smaller players face working capital challenges, with gross margins down 30% and payback periods nearly doubling. The gaming sector now represents 30% of the broader US$ 12.5 billion new media market, with 590 million gamers in FY24, including 25% who spent money on games. Notably, 44% of gamers are women, and 66% are from non-metro cities, with a significant portion in the 18-30 age group exhibiting a high willingness to spend on gaming.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.