Online gaming has traditionally been viewed as a pastime exclusive to a select few. Its current popularity among over 450 million Indians is nothing short of a modern-day marvel. Along with India’s big telecom leap, the introduction of Indianness in gaming has contributed to this sea change.
The availability of fantasy cricket leagues, Poker and Rummy App has unlocked a ready market. Cricket fans, rummy enthusiasts and poker lovers swelled a gaming community that was already engaged in internationally popular gaming titles. With a value of more than Rs 33,000 crores, the Indian gaming industry has impressed everyone with its meteoric rise, from heads of the government to economic analysts.
Gaming: the industry dynamics
The Indian gaming industry is expected to grow at a healthy CAGR of 14.5 per cent between now and 2028. The industry is likely to double itself in value to reach Rs 66,000 by 2028. The telecom boom has been a massive growth driver for the industry, as nine out of 10 Indian gamers use their mobile phones for gaming. Notably, only 37 per cent of the US gaming market is mobile-first, while it is 62 per cent in China. With over 9.5 billion games downloaded in 2023, Indian gamers are world leaders in trying out new games.
Within the industry, Indian gaming is largely reliant on the revenue flow from real money games. Buoyed by the popularity of card games like Rummy, Poker, and Teen Patti, platforms like RummyCulture have attracted millions of card game lovers over the years. In FY23, for instance, $2 billion of the Indian gaming industry’s $3.1 billion revenue was down to real money games. However, in the years to come, a lot of faith is placed on in-app purchases to whip up the industry revenue.
The Indian gaming industry is expected to generate a revenue of $9.2 billion by FY 2029. The revenue by then is also expected to be quite spread out – with $3.6 billion through real money games, $4.3 billion through in-app purchases, and $1.3 billion through advertisements.
In-app purchases, in particular, have increased by 41 per cent in one year alone, which suggests the rising prominence of free-to-play games and the freemium model. Mid-core games like Battleground Mobile India, Clash of Clans and Roblox were seen contributing more than half of the industry’s income growth. It is important to note that digital payments have become mainstream in the last few years, making in-app purchases much easier than ever.
When taken together as one industry, gaming in India is becoming increasingly significant for the Indian economy.
Gaming and economics
The 14.5 per cent CAGR and the estimated doubling of revenue have had an obvious impact on the Indian economy as well. Part of this impact has been a significant rise in employment generation, a fair contribution to the government exchequer and attracting investments.
The gaming industry is expected to add two to three lakh additional direct and indirect jobs in the coming years. In the financial year 2023-24 alone, the gaming industry added more than one lakh direct and indirect jobs. Given its rising importance, the gaming industry has been classified as a sunshine sector.
The present tax regime also means that the gaming industry contributes heavily towards the government’s tax revenue as well. With 28 per cent GST applicable to online gaming, the gaming industry has become a lucrative sector for the national treasury. The gaming industry contributed around ₹7,200 crores through GST deposits during the financial years 2020 and 2023. With the revisions in the GST rates, the tax collection has quadrupled. Presently, GST collections from gaming companies are averaging in the ₹1,100-1,300 crores every month.
The growth of the Indian gaming industry has also raised interest among investors. With the government allowing 100 per cent foreign direct investment in the gaming sector, gaming in India also sees a large amount of overseas interest. Investors have brought in more than $2.8 billion in the last five years. A large portion of gaming investments in India has been from American investors. $1.7 billion of the $2.5 billion in foreign direct investment has been from US investors.
Even prime minister Narendra Modi has pointed out the significance of the Indian gaming market. While he admitted that the sector has a strong overseas dominance, he mentioned that India has the talent and the heritage required to succeed. Government encouragement has been visible in this regard. Besides, Indian game developers and studios are beginning to offer homegrown gaming titles and targeting overseas markets. Just as investors bring in the funds into India, Indian game titles may do the same in the years ahead.
Game on for the Indian economy
The significance of the gaming industry in the Indian economy can be seen across the spectrum. It is an attractive investment option for foreign investors, generating employment for lakhs of Indians. As Indian game developers explore ventures beyond the role of service providers, the industry can become more vibrant.
