Gaming generated $1.8 billion in 2020 at a compound annual growth rate (CAGR) of 38% making India a faster-growing economy than the US and China in the gaming space, says a new report by Boston Consulting Group (BCG) and Sequoia.
Though Indian gaming industry’s revenue is smaller than that of the US ($40 billion) and China ($45 billion) but these two markets grew at a comparatively lower CAGR of 10% and 8%, respectively.
Unlike the US and China where console and PC gaming holds the highest share of gaming revenue, in India, mobile gaming accounted for the lion’s share of the revenue ($1.5 billion) and user base (300 million gamers). BCG estimates the revenue from mobile gaming in India to cross $5 billion by 2025.
India’s massive growth in the gaming market also makes it the fastest-growing segment in the entertainment and media space, while Over the top (OTT) is the second-fastest-growing segment at a CAGR of 26% .
Interest in real money gaming soared to new heights in 2020, due to the Covid-led shift to remote work and learning.
For platforms such as MPL, the active user base grew over 3 times since March 2020. Similarly, spending on in-app purchases in games on Google Play Store and Apple App Store in India in 2020 grew by 51.3% and 30.2%, respectively, as compared to the previous year, as per Sensor Tower.
Despite the increase in spending, the BCG report found that monetization in gaming is still in nascent stages in India with a paying base of 7-8% for non-real money gaming and 15-20% for real money gaming.
eSports is still in nascent stages but is likely to see massive growth with the adoption of more mid-core and hard-core gaming titles, the report claims. The eSports industry generated revenue of $97 million.
Live Streaming has played a key role in making gaming mainstream in India. The report shows that games such as AmongUs hit 21 million monthly active users through streamers. It has also provided a new source of monetization to gamers.
The report also highlights the role played by global companies in India’s gaming boom. Developers trained by International game studios such as EA Sports, Ubisoft and Zynga since 2010, have now started their own companies, the report noted. As compared to 2010, when India has 25 gaming companies, in 2020, India was home to over 275 of them. The massive growth has also drawn large investments in 2020.
According to BCG, investors are bullish on gaming platforms because they mitigate the hits-driven nature of games. Such platforms accounted for over 88% of all VC funding in gaming in 2020. Total funding in gaming in 2020 was $412 million. Funding in Q1 2021 alone was $549 million.