How India's online gaming industry is emerging as a winner amid Covid-19 lockdowns

The sector has become one of the fastest-growing forms of entertainment during the pandemic

Soham Thacker, the founder of Gujarat-based e-sports start-up Gamerji, has seen the number of users on his video gaming platform surge to 1.4 million from 200,000 in March last year, as homebound users turned to alternative forms of digital entertainment during Covid-19 lockdowns.

The platform includes popular options such as football game FIFA Mobile and battle games Clash Royale and Free Fire, through which players from across the country compete with each other in e-tournaments.

“The pandemic played a huge part in the growth,” Mr Thacker, who is also an avid gamer, said.

A burgeoning user base for gaming in India has also caught investors’ eyes. Gamerji, founded in 2019, raised seed capital of $500,000 in November from an Indian venture capital firm, along with the participation of a few angel investors, and is expecting to close its next round of funding later this year.

India's gaming industry has emerged as one of the fastest-growing forms of entertainment during the pandemic, with the sector's value rising to $1.5bn last year, from $1.1 billion in 2019, and is expected to almost double to $2.8bn by 2022, according to Deloitte's Technology, Media and Telecommunications Predictions 2021 report.

Between 2020 and 2022, some 40 million new online gamers are set to emerge in India, taking the total to 368 million, Deloitte said. India has the second-largest number of online gamers in the world, after China.

The country's gaming sector – which has long lagged behind the likes of the US and Europe – was starting to expand before the pandemic, but the crisis has propelled the industry forward at a much faster pace.

“Primarily over the past 15 months, that has been the pivotal point of the growth trajectory, driven by quarantines and lockdowns and a lot of people had limited access to alternative modes of entertainment and more time and disposable money,” said Parth Das, an entrepreneur and investor who set up the Collective Ace group to focus on mergers and acquisitions, and the service sector in the gaming industry.

Most gamers in India play on their smartphones, with mobile gaming making up 85 per cent of online gaming. The growth trend has been boosted by rising smartphone ownership and lower data costs, as well as the country's large young population. Popular games include card and cricket games, but serious players compete for prizes in e-sport tournaments, a niche but growing segment.

The majority of gamers are male, under the age of 35 and based in India's biggest cities.

The surge in popularity for gaming in India is such that platforms on which games can be viewed are also benefiting.

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In the years to come, there is no doubt that India can become a global e-sports powerhouse
Sai Srinivas, co-founder and chief executive of Mobile Premier League

Loco, a Mumbai-based streaming platform for video games, on Monday announced it had received $9m from investors, including South Korean gaming company Krafton and India's gaming and interactive media fund, Lumikai.

The funds will be used to “fuel the platform’s innovation efforts across game streaming technology and gaming content” as gaming moves “from a niche hobby to a mainstream national interest”, Loco said.

Monthly active viewers on Loco have increased six times over the past year, while its monthly active streamers have risen tenfold and live watching hours are up 48 times since June 2020, the company said.

The platform, which competes with YouTube, features some of the country's most popular streamers who play games including Grand Theft Auto, Clash of Clans and PlayerUnknown's Battlegrounds (PUBG) — one of the most popular games that recently returned to India. Along with a number of other apps, PUBG, which was published by China's Tencent, was banned last year by the Indian government amid border tensions with China, but it has now returned to India with a local version.

Many gaming companies are reporting significant growth since the start of the pandemic, including Mobile Premier League.

Founded in 2018, it is one of India's biggest gaming platforms that features games including rummy, pool and chess. In just three years, it has seen its user base expand to more than 75 million and last week announced its foray into the US market.

Its focus is on the e-sports segment that allows players to compete at a professional level.

An Indian boy plays an online game PUBG on his mobile phone sitting outside his house  in Hyderabad, India, Friday, April 5, 2019. A boy’s suicide in India after his mother scolded him for playing the popular online game PlayerUnknown’s Battlegrounds has inflamed a debate across the country over whether the game should be banned. (AP Photo/ Mahesh Kumar A.)

“Over the years, the industry has seen a steady shift to the mainstream,” Sai Srinivas, co-founder and chief executive of Mobile Premier League, said. “In the years to come, there is no doubt that India can become a global e-sports powerhouse. We have one of the world’s largest youth populations as well as a growing, dynamic talent pool of game developers who are creating world-class games.”

The company aims “to help such home-grown talent get new revenue streams by taking their offerings not just to a growing national audience but to a global user base”, Mr Srinivas said.

While awareness of e-sports is still relatively limited, Mr Srinivas said the scope for the expansion of gaming in India is enormous as internet connectivity improves in smaller cities and towns, and females increasingly show interest.

But even as the sector grows, industry insiders are calling for regulation.

“The major challenge with the gaming industry in India is that it lacks a good legal and regulatory framework to support this industry,” said Tarun Gupta, the founder of Ultimate Battle, an Indian e-sports platform that is adding about 50,000 users a month.

Regulation would bring issues such as privacy and content under control, he said. However, investors are not deterred despite the lack of a regulatory framework.

Milan Ganatra is an entrepreneur and investor who recently invested in gaming app Halaplay, marking his first investment in the sector.

“To give you a pure investor point of view, it was a completely numbers-driven decision,” Mr Ganatra said. “From a market value perspective, as an industry I have found value and immense potential in it.

“Real money gaming, in particular, has had a great momentum over the past few years and has got the Indian audience excited about not just having the opportunity to engage in a skill or sport they’re passionate about, but also incentivising them for those skills.”

India's gaming sector is also expected to generate a range of new jobs.

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Real money gaming, in particular, has had a great momentum over the past few years and has gotten the Indian audience excited about not just having the opportunity to engage in a skill or sport they’re passionate about, but also incentivising them for those skills
Milan Ganatra, entrepreneur and investor

“This industry demands professionals to keep the system growing … including designers, managers, media and PR managers, game developers,” said Abhishek Aggarwal, co-founder and chief executive of Trinity Gaming, an Indian gaming talent management company that helps gamers and content creators pursue successful careers.

One way for gamers to earn money is through brand partnerships, Mr Aggarwal said.

“Thanks to the increase in watch time and high interaction level of gaming influencers with their audience, these collaborations are high in demand,” he said.

New platforms also need to strive for profitability, experts said.

The casual online gaming market is largely advertisement-driven, with just 40 per cent of revenue coming from consumer spending, according to KPMG.

“We're not right now profitable,” said Saurabh Pandey, co-founder and chief executive of EloElo, a Bangalore-based gaming start-up launched last year. “We are focusing on engagement. In the next few months, you would start seeing us bringing in a lot of in-app currencies, more brand associations to generate revenue.”

While the number of gamers in India is huge, revenue is lagging, said Collective Ace's Mr Das.

“What's happening now is that most of the business models are evolving now.

“They're moving away from the download volume, advertisement segment, into building revenue streams around customer engagement, including expansion packs, virtual coins,” he said, which users can purchase within the apps to get access to more features of a game.

This could, quite literally, be a game-changer.

If India can boost revenue streams coming into the sector, “this is will make a big difference in India's global position” in the gaming industry, Mr Das said.

Updated: July 4th 2021, 6:58 AM
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