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Indian Gaming Community Growing Rapidly, Market To Reach $8.6 Bn by 2027: Report

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Indian Gaming Community Growing Rapidly, Market To Reach $8.6 Bn by 2027: Report

India-based content and high-speed 5G connectivity to drive growth in the domestic gaming industry, says report

As India’s gaming community grows by leaps and bounds, a recent survey has thrown some interesting light on the gaming industry. 

The study conducted by venture capital firm Lumikai showed 48 per cent of gamers spend money on “mid-core” games, while 65 per cent said they buy in-app games.

Meanwhile, it said, the gaming companies are on track to raise $513 million by the end of 2022, in line with the robust funding the sector has been receiving recently. 

Funding is up 380 per cent from 2019 and 23 per cent from 2020. Moreover, India’s gaming market is set to hit $2.6 billion in 2022 and reach $8.6 billion by 2027. 

A total of 2,240 respondents participated in the pan-India survey, covering both metro and non-metro cities. 

Justin Shriram Keeling, the founding general partner of Lumikai, said India’s gaming industry hit a major inflection point this year, crossing half-a-billion gamers, up from 450 million in the prior year, as it sees strong growth. 

He added the growing gamer base, higher conversion to paid users, and increasing sophistication of Indian gamers are expected to fuel industry growth.

Gaming Consumption

Core titles, like Free Fire, BGMI, and Genshin Impact, saw strong daily engagement with over 80 minutes of average daily playtime per user and more than 10 per cent of mid-core gamers spending more than 10 hours per week.

The popularity of India-based gaming content is also in demand, with 80 per cent of gamers showing a proclivity to play games based on Indian IP, and 69 per cent of non-gamers claim they would play an Indian IP-based game. 

Around 60 per cent of gamers who participated in the survey were males, while 40 per cent were females. The top three motivations for playing games were “relaxation, making money, and killing time”. Also, new content, better in-game items, and the potential to make money were the top three drivers for paid users.

In FY22, India had the biggest global share of game downloads at 17 per cent. India had two billion cumulative monthly active users, and the monthly active users for the top 10 games were 358 million in the same period.

India’s gamer population was 507 million in FY22, up from 450 million the year prior, growing at a 12 per cent compound annual growth rate (CAGR). Similarly, there were 120 million paid gamers and the number has been growing at a 25 per cent CAGR. 

The survey also shows that the number of mobile game downloads grew by 50 per cent to 15 billion year-on-year (YoY) in FY22. 

Mid-core games, like BGMI, and Free Fire, were the fastest-growing category, rising by 32 per cent to around $550 million in gross combined revenue. 

The average revenue per paying user grew by 11 per cent to $20 per year in FY22. 

India’s Gaming Industry Growth

Revenues from real money games accounted for 57 per cent of the current market, and future growth will likely be driven by in-app purchases at a 34 per cent CAGR.

Additionally, the report said Indian gaming companies raised $2.8 billion from domestic and global investors in the last five years. Since 2021, India has seen the rise of three gaming unicorns, more than six strategic exits, and one successful IPO.

Factors Fueling Gaming Growth

With the advent of 5G, latency is set to reduce by 15 milliseconds, enhancing the computation power. Also, the number of smartphone users is expected to increase from around 750 million in FY21 to one billion by FY26, an increase of 33 per cent. 

Salone Sehgal, a founding partner of Lumikai, said the last 28 months had been a watershed moment for the industry, attracting investment of over $2.6 billion. 
 

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