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Home Technology Gaming

The Push For Gaming, In Five Charts – Mint

the-push-for-gaming,-in-five-charts-–-mint
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The Indian gaming industry employs around 38,000 people, and this is expected to jump to 120,000 by 2025, according to a report by Internet and Mobile Association of India (IAMAI) and consulting firm RedSeer. (Getty)Premium
The Indian gaming industry employs around 38,000 people, and this is expected to jump to 120,000 by 2025, according to a report by Internet and Mobile Association of India (IAMAI) and consulting firm RedSeer. (Getty)

4 min read . Updated: 15 Feb 2022, 01:22 AM IST howindialives.com

  • During the pandemic, despite uncertainty, the Indian gaming sector cleared one level in terms of demand, enterprise and investments. Its acknowledgement in Budget 2022 should help it progress further

When finance minister Nirmala Sitharaman, in her Budget speech on 1 February, announced plans to set up a task force to promote the animation, visual effects, gaming, and comics sector, executives of gaming companies felt they had cleared one level in a complex game. Just a few months back, their concern was that regulations might dent the sector’s growth. 

After an 11-year-old boy’s suicide was attributed to gaming addiction last month, Madhya Pradesh said it would join Andhra Pradesh, Karnataka, Kerala and Tamil Nadu in passing regulations against the sector. China’s crackdown on online gaming last year underscored the risks before the Indian gaming industry. But the Budget announcement suggested a more pragmatic approach—one that also saw the sector as an employment generator. Sitharaman said the task force would “recommend ways to realize this and build domestic capacity for serving markets and global demand.”

The Indian gaming industry employs around 38,000 people, and this is expected to jump to 120,000 by 2025, according to a report by Internet and Mobile Association of India (IAMAI) and consulting firm RedSeer. The number of gaming companies increased from 25-50 in 2015 to 275 in 2019 to above 400 in 2021, the report said. In the backdrop of movement restrictions induced by covid-19, the sector drew twice as much private investments in 2020 and 2021, as it did in the preceding five years. Another report by venture capital firm Sequoia and consultancy BCG points out that investors have been attracted to gaming platforms (such as MPL and WinZo) because they are diversified across titles and genres.

Rural Drive

Underlying these investments is the growing pool of gamers in the country, which has expanded from 300 million in 2019 to 500 million, according to KPMG. In a 2020 survey by YouGov, a research and analytics firm, 71% of respondents from India said they had played video games or mobile games, making it one of the top 10 countries.

While gamers were concentrated in tier-1 cities, they are increasingly coming from tier-2 cities and rural areas. The number of active internet users in rural India has grown from 134 million in 2017 to 299 million in 2020, according to data analytics company Kantar. Penetration rate of smartphones is expected to increase from 40% in 2021 (600 million users) to 60% by 2025 (860 million users), again led by semi-urban and rural areas. As a result, while metros are expected to add 50 million mobile gamers during this period, tier-II cities and rural areas could add 200 million, according to RedSeer.

Money Game

Many businesses that were drawn by India’s large population size have struggled to monetise their user base. The experience of gaming companies has shown that there is a path to revenues and profitability. According to IAMAI, 40% of hardcore gamers spend about ₹230 a month on games. BCG and Sequoia estimate mobile gaming revenues at $1.8 billion at present, with the potential to grow to $5 billion by 2025. The IAMAI-RedSeer report pegs 2025 revenues at $6-7 billion.

Of the $1.8-billion revenues in 2021, hardcore gamers accounted for 21%. This segment is expected to expand to 30% by 2025, and drive revenues. They also engage deeper, spend four times more than casual gamers and invest time in watching e-sports, a key sub-segment. The streaming of games through YouTube, Twitch and other platforms is also expected to drive advertising revenues in the coming years.

Global Opportunities

India is only a part of the bigger story. According to Newzoo, a market research firm specialising in games and e-sports, the number of gamers globally is expected to grow to 3.4 billion in 2024, from 2 billion in 2015 and 2.7 billion at present. It’s a reason why last month saw two big acquisitions in the segment: Take-Two Interactive Software buying Zynga for $12.7 billion, and Microsoft buying Activision Blizzard for $70 billion.

These numbers also reflect the state of game development in advanced markets, characterised by high levels of skills and stronger capacity in terms of technology and investments—the two focus areas of the new task force. A 2017 report by KPMG says India can move towards characteristics of developed economies (with gaming demands met by local development) and also become the preferred exporter of gaming products and services to developing economies.

www.howindialives.com is a database and search engine for public data.

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