August 05, 2020
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Opinion | Online Gaming Industry Can Boost Make In India Initiative

The online gaming sector can generate direct employment for around 40,000 people and bring in tax revenues of Rs 28 billion by 2022

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Opinion | Online Gaming Industry Can Boost Make In India Initiative
Opinion | Online Gaming Industry Can Boost Make In India Initiative

Coincident it may be, but the rapid growth of online gaming in India falls in line with the country’s ‘Make in India’ programme. The online gaming growth in 2020 is being driven by increased time spent at home due to the coronavirus, regional language interfaces being created for popular games, proliferation of smartphones and inexpensive data, growth in digital payment ecosystem, increased interest from women players and high-volume brand and celebrity endorsements. This is the second year in a row that online gaming has been the fastest growing segment of the Indian media and entertainment industry.  At present it’s the seventh largest segment and we expect it to become fifth by 2022 with 440 million gamers.

Online gaming requires investments in game engine and game play development, character creation, marketing and publishing, in-app purchase technology, merchandising, etc.  Leading global game publishers exist in the USA and in China. The Middle East and South Asia need a publisher of quality and scale who can invest in understanding needs of the audience and growing the market.  In addition, India – with its DNA of quality tech back-office of the world – can find big opportunity in game development, monitoring, and enhancing, etc. services to gain a slice of the global online gaming market.

Also Read: From Ludo To Rummy, Online Gaming Comes To Roost During COVID Times, But What Is The Real Deal?

The business opportunities asides, online gaming will also fuel to the concept of “atmanirbharta”, the fundamental bedrock on which India’s gaming population will increasingly become self-reliant, innovative and above all chose their own field of play. Among the key trends that will govern the future of online gaming will be the emergence of user generated gaming (UGG) models -- similar to user generated content models – as gaming becomes more Application Programme Interface (API) driven and users can then use building blocks to create games of their own invention. It will be the ultimate democratisation where players build games they want to play.

For stable regulation of online gaming or legalising sports-betting, India must have fair play rules.

Gaming will integrate ever more with education and learning, as we can see through efforts made by Byju’s, StepApp, etc.  This can be a game changer as India tries to build a quality base of teachers to educate its 300 million-plus school students in the basics. Online gaming is entering an interesting state where the online mixes with the offline world.  We can expect more Internet of Things (IoT) enabled devices providing performance data – not just for professional sportspersons but also consumers like you and me -- bringing gaming, challenges, leaderboards, contests, etc. to the physical world.  Deep performance data and analytics will open up opportunities in performance enhancement for athletes and sportsmen, as well as remote training and coaching, medical assistance and ecommerce interactions with the masses

Also Read: Business Of Online Gaming In India: Big Bucks, Bigger Consumer Base And Biggest Issues

While the online gaming sector can, by our estimates, generate direct employment of around 40,000 people and bring in tax revenues of INR 28 billion by 2022, there is need for firm action to grow this segment even further as the potential is simply immense.

Stable regulation is required to ensure investments in the online gaming business are not at risk.  Certain states still do not permit certain types of online gaming.  Stable regulatory environment will ensure the entry of more foreign players into India and can help grow the segment faster.

As the segment moves from discrete devices to cross-platform and cloud-based gaming, India can play a large role in developing technology for such platforms and the analytics required to support them, for which innovation funding is required

Legalising the unorganised sports betting market, which (according to different studies) is valued at between INR 3 to INR 6 trillion, can bring in huge growth and tax revenues to the government, provided fair play rules and adequate controls are put in place, as India has previously done with lotteries.

The trends showing the growth of online gaming and gamers are beyond dispute.  The key question is how the government will and businesses play the game!

Also Read:

‘My Story Is Inspiring Others To Take Up Online Sports Seriously’

 From Pac-Man To PUBG Mobile, Why E-Sports Threatens To Overtake Cricket In India

Opinion | Online Gaming Companies Are Suffering Due To Lack Of Clarity On Legality Of Business Models

(Ashish Pherwani is the India head for Media & Entertainment at Ernst &Young. Views are personal.)

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