Nov 29: The pandemic additionally raised the speed of the fast-paced development of the Indian gaming market. Everybody is playing more, while more and more gamers are deciding it is worth paying for playing their favorite games. The revenue mix is developing as well, with IAPs accelerating, but RMG will keep dominating the scene at least for the next five years.

Mobile Gamers Now Spend 3.6 Hours Playing Every Week

The average time desi users spend on OTT platforms has risen by 12 per cent due to the Covid-19 pandemic induced restrictions and lockdowns. Meanwhile, gamers in India are now spending 3.6 hours per week playing games on their mobile phones, as compared to 2.5 hours before the coronavirus struck the whole world. This is a growth of 44 per cent, as is pointed out in a new collaborative study by global consultants RedSeer and gaming and interactive media venture capital fund Lumikai.

When surveyed, 30 per cent of users say they are spending more time on mobile games now compared to one year ago, and 20 per cent expect their gaming time to increase even more in the future. Data shows that for the last 12 months the number of game downloads has grown by 50 per cent.

Monetization is Getting Easier with the Growth of Paying Users

Until recently, monetization was often a struggle for online gaming platforms in India, but several factors besides the growing engagement due to Covid are working together to raise the level of revenues. The growing ecosystem of startups, backed up by a large influx of investments, the integration of UPI into gaming apps and the ease and comfort of online payments, combined with the growing maturity of desi gamers, are all helping the process.

As of the moment, 22 per cent of the 425 million Indian gamers pay for their gaming experience. In 2020 the number of desi paying gamers was 80 million and is expected to reach 95 million by the end of 2021. Projections envisage this number to triple by 2025 reaching 235 million with growths of 25 per cent each year.

The RedSeer and Lumikai report stresses that new paying users (NPUs) have increased by more than 50 per cent which makes India one of the fastest growing gaming markets globally. Estimates place the market’s worth at $ 7 billion in FY 2026 or three times the size in FY 2021.

“This is an exciting time for the gaming ecosystem in India. Access to gaming is democratised with increasing participation from Tier-2 cities and beyond, gamers are maturing in the way they play different gaming genres, and unprecedented growth in new-paying users (NPU) to drive the overall gaming market to become 3-times in the next 5 years,” says Mukesh Kumar, Engagement Manager at RedSeer Consulting.

RMGs will Keep Driving Monetization

The current average annual spending of a paying desi gamer is estimated at $ 16 (roughly ? 1,200), with average spending per month varying between $ 0.6 (? 45) and $ 3.5 (? 260). Western real money online roulette, poker and blackjack casino games, along with traditional Indian Andar Bahar, Teen Patti and Rumi, and hybrid genres including fantasy sports are the backbone of gaming monetization in Bharat.

In-app purchases (IAPs) are expected to grow faster at a rate of 30 to 40 per cent for the next five years, driven by the rising number of users who are willing to pay for their casual or hyper-casual games.

Nevertheless, real money games are projected to account for 53 per cent of all gaming revenue in FY 2026, followed by IAPs at 31 per cent and revenues from ad placement at 11 per cent.

“While real-money gaming (RMG) will continue to dominate the market, in-app purchases (IAP), virtual gifting, etc to become mainstream spend categories among paid gamers, and the revenue from IAP is expected to outgrow overall India’s gaming market growth rate,” explains Mukesh Kumar.

“What has emerged is a picture of the market that already exceeds preconceived notions around size, growth, sophistication, and most importantly propensity to pay. India’s gaming market is due to 3x in value to over $7 billion by 2025, driven by a healthy diversity of monetization mechanics that indicate plenty of white spaces for new investment, and massive potential for a new generation of leaders across the gaming value chain,” concludes Justin Keeling, General Partner at Lumikai Fund.