(After experiencing staggering growth in recent years, the online gaming industry in India is still expected to keep on growing making it India’s “The Big Thing”.)

“On the Rise”: Online Gaming Industry in India

Over recent years, online gaming has experienced a remarkable surge in popularity worldwide, and India is certainly no exception to this trend. In 2022, the Indian online gaming market boasted an estimated value exceeding $2.8 billion. Forecasts from experts indicate an impressive CAGR for India, projected to be around 40% over the next 5-10 years, as opposed to the global rate of 9.9%. This remarkable growth can be attributed to the attraction of adults towards online gaming, the rapid expansion of internet accessibility, and the increasing affordability of smartphones. As a result, this rapidly growing industry is poised to take center stage in India, bringing in exciting prospects for both gamers and game developers.

Indian adults driving the growth of online gaming, in especially the adventure and battle royale genres

The surge in online gaming within India primarily finds its momentum among gaming enthusiasts from 18 to 44 years of age. In the Indian online gaming market, 10% are in young adulthood (18-24), 59% are in later adulthood (25-44), and the remaining 31% are aged 45 and above. Adults, in particular, have a pronounced interest in gaming. These individuals play games for various reasons, including entertainment and competition, and in-game purchases have become a significant part of their experience. In fact, 52% of all adults rank it as their primary interest, engaging in games for amusement, relaxation, social interactions, and the exhilarating thrill of competition. 

As the 2020 pandemic lockdowns limited face-to-face interactions, over 30 million Indian adults gravitated towards online games, notably battle royale favorites like PUBG and FreeFire. Of these adults, a notable 80% are hardcore enthusiasts, diving into games several times a day, 11% play games at least once a day, and the rest play sporadically. This deep involvement in gaming suggests a promising future and broader Online Gaming prospects for the online gaming sector despite a majority of adults leaning towards more affordable games due to budget constraints. However, the same cannot be said for adults in Tier I cities, where there is a notable surge in Real Money Gaming (RMG), and the younger audience there seems slightly more willing to invest in their gaming experiences. This shift is underscored by the growing popularity of in-game purchases, as seen in popular gacha titles like Genshin Impact. This evolving attitude towards gaming expenses opens new avenues for businesses.

Growth of online gaming due to rapid Internet penetration

As internet accessibility becomes more widespread and affordable in India, the online gaming industry stands poised for sustained growth. This surge in connectivity introduces many to a diverse range of online games. Affordable internet has been a major catalyst for internet penetration in India. The country experienced an impressive surge in internet users, showing a year-on-year growth rate of 20.7%, elevating the number from 93 million in 2010 to 1,240 million in 2023. This momentum is expected to continue, with a forecasted positive CAGR of 2.6% from 2023 to 2030.

Accessibility to the internet in India has improved significantly, due to various regional, national, and international telecommunications giants, ensuring connectivity for people across the country. For instance, Reliance Jio, which launched internet services in 2016, rapidly expanded its customer base from 72.16 million at inception to 424.5 million subscribers by the end of 2022. Reliance Jio initially offered free talk time and data packs with nationwide coverage, making internet access available to everyone. This was coupled with a nationwide reduction in data costs, with the price per GB falling from US$0.91 in 2016 to US$0.17 in 2022, ranking India as having the third-lowest cost of mobile data globally.

This trend is further amplified by India's substantial youth population, who are more inclined to go online for gaming. With 75% of the total population under the age of 40, India's adult population has become a crucial demographic for the online gaming industry, with around half of them likely to engage in online gaming during their leisure time. The increasing adult demographic offers considerable market potential for online gaming companies in India. Presently, business strategies targeting these trends related to online gaming are on the rise, with content tailored to the youth and gaming IPs transitioning into popular forms of media. Examples include "Arcane," an animated series based on Riot Games' League of Legends, which was released on Netflix in 2022, along with the continued success of "The Witcher" series and the development of more gaming-related IPs. The combination of a sizable young population, easy and affordable internet access, and proactive business strategies focusing on gaming will be the driving forces behind the ongoing growth of the online gaming industry.

Cheaper smartphones are the catalyst for online gaming

Between 2010 and 2022, India witnessed a significant rise in the number of individuals transitioning to the middle class. This, alongside the increased affordability of smartphones, resulted in more people owning these devices. Given that mobile devices are the favored choice, with 91% of the gaming population opting for them, the increased accessibility of smartphones has been a driving force behind the expansion of online gaming applications and, consequently, the entire online gaming industry in India.

The penetration of smartphones experienced a remarkable CAGR of 30.4% from 2010 to 2022. The decreased cost of smartphones lowered the barriers to entry for individuals moving from lower-income brackets to the middle class (with an income range of INR 5 to INR 30 Lakh). The middle-class segment expanded at a rate of 31% during this, with over 432 million people currently residing in this economic category. This shift is anticipated to continue, with projections indicating that 61% of the total population will be classified as middle class by 2047, growing at a CAGR of 23%. This outlook bodes well for the future of online gaming, as smartphone ownership is forecasted to maintain a positive growth rate of 3.8% in the forthcoming years. With more people gaining access to smartphones, which are the preferred platform for online gaming, a larger portion of the population will have the opportunity to engage in online gaming.

Conclusion

The online gaming industry’s surge in India owes its rise to a combination of factors, propelling it into a thriving growth industry within the nation. Foremost among these factors is the appeal of online gaming to adults, particularly those aged 18 to 44. They partake in online gaming for the downright pleasure of entertainment, the thrill of competition, and the lure of in-game purchases. Simultaneously, the rapid expansion of internet accessibility, marked by a significant uptick in internet users and the plummeting cost of data, has equalized the online gaming experience, reaching a broader spectrum of the population. Additionally, the propagation of affordable smartphones has further facilitated access, with the majority of gamers favoring these handheld devices. With India's considerable adult demographic, combined with accessible internet options and proactive business strategies, the online gaming industry is poised to sustain its impressive growth trajectory, offering a wealth of opportunities to both gamers and game developers in the years to come.

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