• India's soaring gaming industry is valued at $930 million, and is number one in the world.
  • India has over 560 million internet users, making it the second-largest internet consumer.

The first nine months of 2020 saw India rise to the number one spot in mobile game downloads worldwide, clocking 7.3 billion installs and raking in a 17% market share of the installs volume, as per SensorTower’s data.

Over 50% of India’s population is below the age of 25, and 60% of the nation's gamers are under 25 years of age too. The gaming userbase surpassed 365 million in March 2020 as per KPMG’s media and entertainment report.

Mobiles staging the games

Mobile users form an overwhelming 85% of the industry, followed by PC users at 11% and tablet users at 4%. Internet penetration is 30%. Inc42 determined that the revenue of major Indian gaming and eSports companies was $68 million in 2019.

Mobile gaming takes the largest chunk of the gaming market thanks to access to affordable smartphones growing at 15% year-on-year for the past five years in India, high-speed 4G internet penetration and the world’s lowest data tariffs. Together with the rise of mobile games, these factors feed into India’s youth having a growing appetite for content.

At its peak, PUBG Mobile had an estimated 34 million Indians playing daily. Indians alone were responsible for downloading the battle royale genre title a whopping 175 million times.

A greater willingness to pay for services comes from improved disposable incomes at purchasing power parity (25% over 2016 levels) and wider adoption of digital payments as per Deloitte’s Telecom, Media and Telecommunications Predications report.

How COVID-19 turned us away from TV

The COVID-19 pandemic saw a shift in media and entertainment consumption trends, with KPMG estimating a 20% contraction in 2020 in typical segments such as film, TV and print. In contrast, they foresee rapid change to gaming and digital media consumption, projecting global growth bouncing up to 33% to reach $25.4 billion in 2021.

This is lent credence by gaming platforms such as Google Play and Apple App Storerecording 50% increases in engagement during lockdown. BARC & Nielsen report that Indians now spend 218 minutes gaming versus 151 minutes before lockdown.

Investors including Sequoia Capital and Kalaari Capital have already increased their investments by 78% during 2020 to $173 million, as per Tracxn Technologies data. There are now over 400 gaming companies in India, as reported by Maple Capital Advisors.

The surge in gaming comes from a growing need for virtual entertainment with friends, family and peer groups, coupled with the rise in influencers encouraging Indians to play more games. With digital consumption becoming mainstream, the demand for more diverse content has also grown.

Mobile games serve as virtual social spaces fulfilling consumers’ needs to connect in challenging times. Gaming cuts across geographies and permeates both tier one and two cities, and urban and rural areas alike.

An Inc42 report on the eSports landscape found that eSports in India accounts for 4% of the nation’s userbase and formed just over 9% of industry revenue before the pandemic. This sector is expected to grow 36% year-on-year in the next three years, with projected revenue of $95 for 2020. The Indian eSports audience for competitive gaming tournaments already reached 17 million in 2020 versus 6 million in 2017.

Newzoo predicts that IP-holders seeking to bring their franchises to new mediums will choose mobile gaming as the preferred platform because of lower development costs and shorter timeframes. The most popular gaming genres are the hypercasual and casual genres which includes popular games such as Hunter Assassin, Talking Tom and Carrom Pool, respectively.

Developers should continue to create mobile-first experiences, but imbibe new perspectives that are more inclusive towards female audiences.

How advertising is adapting

Advertisers can effectively target audiences who already play games with authentic brand messaging. Gaming cohorts share similar demographic and behaviour profiles.

Newzoo found that 80% of Indians consume food or drinks regularly while playing games. This information is critical to FMCG brands in developing their marketing strategy. Brands can utilize these channels to build trust and engagement with potential customers.

The Indian gaming industry has grown nearly 60% over the last three years, and the sector shows no signs of slowing. In the long term, it may have the potential to overtake Indian box office revenues, which are presently more than double that of the gaming industry. The average consumer is value-conscious and price sensitive, and the product strategies and monetization models reflect this.

Most revenue in gaming is generated from advertising, and a smaller proportion comes from user in-app purchases. So far, the business model has been unequivocally free-to-play and is the standard in mobile gaming, a low-entry barrier for would-be gamers.

This is changing; as per the white paper, Understanding Value in Media: Perspectives from Consumers and Industry, engaged gamers are more likely to be game service subscription subscribers than other media and entertainment consumers. This is unlike the behaviour of engaged video, music and sports consumers.

Regulation and talent very much on the government’s radar

As gaming grows, the Indian government is expected to play a more active role in facilitating and regulating the industry.

Recently, Indian prime minister Narendra Modi called for the development of content promoting indigenous Indian culture. Regulators are already monitoring company data-privacy policies such as storage and the transmission of data belonging to Indian users.

Then there’s the burgeoning fantasy-sports segment, which currently doesn’t enjoy independent legal recognition, although it did rake in $338 million in the last financial year. The government’s planning think tank, Niti Aayog, published its first draft guidelines proposed for the conduct and regulation of fantasy sports, but noted that the segment could attract FDI inflows of $1 billion in the coming few years.

The Indian government is also expected to establish industry and academia interfaces to foster new career paths in gaming and to build up a considerable talent pool in the sector.