India has emerged as one of the fastest-growing gaming markets in the world as there has been a significant boom in the number of paid users and their propensity to pay is springing up the space, said RedSeer in its latest report.
The country’s gaming sector is expected to grow three times to reach $7 billion by 2026 with increased spending on in-app purchases, the report added.
India’s gaming market was sized $2.2 billion in 2020 and has emerged to be one of the fastest-growing space. The growth has been attributed to the growing volume of paid users. Though real-money gaming will continue to drive over half of the gaming revenue, more users are expected to spend on in-app purchases and virtual gifting.
The revenue share of in-app purchases in games will grow from 25% to 31% in the next five years at a CAGR of 30-40%, the report said.
The report shows that an average Indian gamer spends $16 annually on gaming, and takes a week to start paying to play games. Currently, only 22% of gamers pay for playing games.
The total number of paid gamers in 2021 is expected to be 95 million. By 2025, it is expected to grow to 235 million.
According to RedSeer, the lion's share of this growing number of paid gamers will be seen in casual, mid-core and eSports segments in the form of in-app purchases.
On October 5, 2021, the Internet and Mobile Association of India (IAMAI) reported that the Indian gaming market is expected to triple over the next four years, and projected to touch $6-7 billion in value by 2025.
The emergence of new gamers in tier 2 and tier 3 cities is also expected to drive the spending on games.
The report attributes this to low data tariffs, increased smartphone penetration, availability of gaming content in regional Indian languages and the rising interest in gaming after the pandemic.
Unlike other large gaming markets such as the US, India has traditionally been a free-to-play market that depended heavily on advertisements for revenue.
The arrival of real money gaming and fantasy sports has changed that. The pandemic-led lockdown and shift to remote work and learning led many non-gamers to turn to casual gaming for entertainment and turned casual gamers into serious gamers.
On January 8, 2021, Sensor Tower reported that spending on in-app purchases in games in India grew by 51.3% on Google Play Store and 30.2% on Apple App Store in 2020 as compared to the previous year.