India's gaming market is projected to be valued at $7 billion by 2026, more than three times the sector's current value, on the back of a growing user base that is also shelling out more on in-app purchases, according to research firm Redseer.
Gamers in the South Asian country are benefitting from a rapidly-evolving ecosystem. Helped by rising smartphone and internet penetration and the world’s lowest data tariff, users across India are maturing in the way they play different genres, casual, mid-core and paid games.
The country with a population of about 1.38 billion has around 500 million digitally-native users.
"India’s gaming ecosystem is transforming at a fast pace as gaming is gaining popularity as a medium of recreation. Today, India’s gaming market is at a once in a generation inflection point exceeding previous estimates on sophistications, scale, growth and propensity to pay. The market is maturing both from a demand and supply perspective," Redseer said in its report.
The global mobile gaming market is emerging to be an increasingly lucrative segment and was one of the sectors that benefitted from the Covid-19 pandemic that forced people to stay indoors and consume more content on their mobile devices.
Mobile gameplay posted a sharp increase since the pandemic began, with 63 per cent of respondents reporting an increase in gameplay time, especially in countries hit hard by Covid-19, according to a survey by the International Data Corporation.
The mobile segment accounts for a significant share of the overall gaming software industry. The market for global mobile gaming content was valued at $121.1bn and is expected to grow 40 per cent to hit $169.7bn by 2025, data from Statista showed. Asia generates the most revenues in the segment.
Real-money games are the largest source of revenue for India's gaming market, accounting for 53 per cent. In-app purchases are second (31 per cent), followed by advertisements (11 per cent). Compound annual growth rates for the first three verticals are as much as 30 per cent, 40 per cent and 20 per cent, respectively, from 2021 to 2026.
The rise in casual and hyper-casual gaming – segments that are simple and have minimalistic interfaces that do not necessarily require being competitive – are the categories that will be driving this growth.
India's gaming market, which currently has 80 million paid gamers, is projected to surge almost 194 per cent to 235 million by 2025. In-app purchases – extra content or subscriptions bought within an application that costs real money – are pegged to grow at 30 per cent to 40 per cent.
The growth in India's paying users has also made it the one of the world's fastest-growing markets, Redseer's report said. Growth in new paying users is at 50 per cent; at present, only around 20 per cent of users pay for games.
An average Indian gamer spends $16 a year on gaming and it takes around a week to start paying to play games, it added.
"With the rise of online gaming, more so post-Covid, newer games and genres have appeared in the business. Driven by a healthy diversity of monetisation mechanics, India-first content and increasing propensity to pay, the gaming market matures and evolves to the next level, making it an exciting space to watch," Redseer said.