Indian Gaming Market Analysis: In-App Purchases, Ads, and Real-Money Games

Indian Gaming Market Analysis: In-App Purchases, Ads, and Real-Money Games

India’s gaming market has witnessed significant growth in recent years, with the industry reaching a valuation of $3.1 billion in FY 23, following a 19% year-on-year increase. This growth has been driven mainly by in-app purchases, ads, and real-money games, which have collectively contributed to the market’s expansion.

India is the world’s largest mobile gaming market in terms of App downloads

  • Transaction-based game revenues increased by 39% in 2022 from 2021
  • The sector is expected to grow by 20% by FY25 to reach INR 231 Bn
  • India has the largest fantasy sports market, with a user base of 180 Mn
  • The industry is expected to grow at a CAGR of 33% to reach INR 25,300 Cr in FY27
  • Indian gaming raised $2.8 Bn from domestic/global investors in the last 5 years. Funding increased by 380% from 2019 and 23% from 2020
  • India has produced 3 gaming unicorns: Game 24X7, Dream11 and Mobile Premier League

Key Trends

  • Real money games are a major force within the Indian gaming market, making up $2 billion of the industry’s total revenue.
  • In-app purchases account for a revenue of $0.5 billion.
  • Ads generate $0.6 billion in revenue.
  • The gaming market is projected to grow to $7.5 billion by FY 28.

Dominant Genres and Platforms

  • Mobile gaming is the predominant platform within the Indian market, with the majority of gamers accessing content through their smartphones.
  • Popular genres include casual games, strategy games, action and adventure games, and real-money games such as poker, rummy, and fantasy sports.

Major Players

  • Tencent Games, known for hits like c, dominates the mobile gaming industry in India.
  • Other key players include local developers like Octro, Games2win, and Moonfrog, as well as global leaders like Electronic Arts, Zynga, and King.

User Demographics

  • Indian gamers are primarily young individuals, with the largest demographic being the age group of 18-35.
  • Gender-wise, the gaming market is dominated by males, but female players are increasing.
  • Smartphone penetration and access to affordable data plans have contributed to greater accessibility, fueling growth in the gaming market.

Impact of COVID-19

The pandemic has had an undeniable influence on the gaming market in India. With lockdown restrictions and social distancing norms in place, people looked for alternate ways to entertain themselves, leading to an increased demand for mobile gaming. Additionally, the work-from-home model has resulted in more time spent on gaming platforms.

Challenges and Opportunities

  • Despite the growth of in-app purchases, revenue generation remains a challenge due to a large number of gamers opting for free-to-play models.
  • Combatting piracy and ensuring secure transactions for real-money games are critical concerns.
  • Adoption of new technologies such as cloud gaming, AR, and VR presents opportunities for further expansion and market differentiation.

Recent Government Initiatives

  • Indian Government is setting up a National Animation, Visual Effects, Gaming and Comic (AVGC) Centre of Excellence in collaboration with IIT Bombay.
  • Karnataka and Telangana have dedicated state-level AVGC policies.
  • The government will also set up an AVGC Task force to realize the sector’ potential.

Recommendations for Developers and Investors

  1. Focus on creating engaging content and seamless user experiences to encourage adoption of in-app purchases and subscription models.
  2. Harness the potential of casual, hyper-casual, and social games, which are highly popular among Indian gamers.
  3. Target the female demographic by offering inclusive and diverse gaming content.
  4. Ensure a secure gaming environment for real-money games by investing in robust fraud prevention and data security measures.
  5. Explore partnerships with local developers and IPs to capitalize on the familiarity-factor and further enhance market share.
  6. Monitor and analyze the long-term impacts of COVID-19 and adapt business strategies accordingly to maintain growth in a post-pandemic landscape.

By understanding the composition and trends driving the Indian gaming market, developers and investors are poised to capitalize on the industry’s burgeoning growth potential, while addressing key challenges and adapting to an ever-evolving landscape.

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