Indian gaming industry poised for takeoff

Ten years ago, Netflix was a small streaming platform, relatively unknown in emerging markets, used only by movie “nerds”. Over the years, the platform has innovated its offerings and evolved consumer behavior to become the cultural norm across regions. A sector that is following the same trajectory is the gaming industry. Gaming giants are putting their weight behind innovation and rapidly expanding to become the ‘Netflix’ of Gaming.

The global gaming industry pioneered by Japan and the US have evolved over the years and revolutionised the gaming experience. The next phase of industry growth is set to take place in emerging countries in the Asia Pacific region, including India. With a worth of over $152 billion and revenues of over $73 billion in the Asia Pacific alone, the gaming industry is one of the most overlooked industries in the region. However, the current global pandemic and stringent lockdowns have increased the demand and focus on gaming, and is slowly taking a small but relevant place in people’s lifestyles.

Gaming has been elevated from just a recreational activity to a new way of connecting with friends, for people across age groups. The gaming industry in India is in a tremendous growth phase and is expected to garner revenues of Rs 118.8 billion by 2023.

The E-Sports segment is witnessing a phenomenal growth across India. The absence of live games during lockdown has further piqued people’s interest in e-sports. India’s e-sports market is currently at a nascent stage. However, the number of occasional viewers and e-sports enthusiasts is expected to grow more than five-fold by 2021. E-sports in India is expected to rake in revenues from avenues such as advertisements, merchandise and ticketing.

Monetizing e-sports tournaments through media and broadcasting rights is also not that far a sight. E-sports is also growing on mobile devices, making it more economical for developers to enter countries such as India. Parimatch has also witnessed an increase of 22 percent in the esports segment from February to April, and the major contributors to it have been users from the Asia Pacific region. The company has witnessed a growing number of esports segment consumers from the region since the beginning of 2020, which indicates the growth trajectory of esports in this area.

The share of mobile games in the total revenue of the global gaming market has climbed over the years and is expected to contribute over 40 percent by 2021. India stands tall among the emerging markets in terms of smartphone engagement, making it a frontier for gaming giants. The Indian smartphone market has boomed since the last few years, resulting in an increased demand for mobile games. Mobile games publishers are trying to maximize the target audience in emerging markets by releasing “Lite” versions of their products.

According to a report, the Asia-Pacific region generated 47 percent of revenue for game makers in 2019 and is only bound to grow in the coming years. The rapid rise in the young population in countries such as India and China makes it a high growth potential market. Smartphone penetration is rising rapidly in India, and the total number of handsets in use is forecasted to exceed 800 million by 2025. Overall data consumption is expected to rise by more than 60 times between 2015 and 2025.

While the industry has been showcasing accelerated growth, it still faces a certain identity crisis among some emerging markets. There is currently a negative connotation and certain prejudice against gaming in India. A government push for the industry will enable to change perspectives. Monetization and branding for the industry is at a nascent stage, and there is an urgent need to increase bandwidth and decrease latency. Gaming associations need to take into account these factors and develop regulatory measures to ensure that the industry reaches its full potential.

Gaming is going through its defining phase in countries around the world and new immersive gaming trends are what can capture the market in the long run. Cloud gaming services are expected to be the next big thing in the industry. Even though it is currently in its teething stages, a Netflix style library of on-demand games can be a game-changer in the longer run. Real Money Gaming (RMG) such as Rummy and Poker has captured a large share of the gaming pie in a short period and the developers of these platforms are bound to diversify and capture the rural market.

Non-gaming apps are integrating games into their platforms, which will eventually make gaming a universal part of lifestyle, similar to OTT platforms. Immersive gaming experiences focus on Augmented reality and Virtual reality are likely to bring in the next wave. Fantasy cricket leagues are the perfect example of the level that gaming can reach in India. Going ahead, the leagues will branch out to other popular Indian sports and witness monumental growth.

As of now, a number of definitive factors indicate a bright future for the gaming industry in India. The next phase of the industry will be focused on cultivating dedicated customers and locally relevant themes. The industry is growing at a rapid pace and is expected to reach a wider audience in the near future. The increasing popularity of the sector will be continued to be led by continued innovation and quality content, which will enable gaming to be integrated into the modern Indian pop culture.