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The booming gaming industry in India is opening doors to bigger investments.
At a time when the world finds itself in isolation amidst lockdowns and other pandemic containment measures, people living a digital era are quickly turning to digital technology for solace, information and entertainment. The internet today has become a lifeline. And life as we know it revolves more and more online.
This has seen the emergence of new trends, most of which are threatening to overturn older, traditional models of living entirely on their heads. Whether it is working from a virtual office, studying in a virtual classroom or relaxing by living out fantasies in the virtual world.
And the digital wave is sweeping across the globe. In countries like India that are fast emerging as dominant players on the globe stage, these trends are even more fascinating, especially given the scale. A country of 1.3 billion people is a vast, vast market and while the virtual world maybe infinite or nearly infinite, it needs consumers. And 1.3 billion is a lot of consumers. Virtual or otherwise.
The seeds of digitalisation in India were sown a while back with initiatives like Digital India. However, the availability of cheaper data and the popularity and affordability of smartphones has played a key role in really digitalisation in India. The pandemic, that forced Indians to sit at home, merely cemented the idea that the virtual age is here to stay. With long lockdowns in place and 1.3 billion people stuck at home, Indians have been turning to India, it would seem, new ways to entertain themselves in quarantine via online games.
The gaming sector in India attracted $544 million in investments during the August 2020-January 2021 period, according to a recent report by Maple Capital Advisors. This is set to double over the next 12-18 months on the back of higher user awareness and accelerated engagement. According to another report by SensorTower, the first nine months of 2020 saw India rise to the number one spot in mobile game downloads worldwide, clocking 7.3 billion installs and raking in a 17 per cent market share of the installs volume.
In March 2020, the gaming userbase surpassed 365 million as per KPMG’s media and entertainment report, with more than 400 million gamers active, making up over 15 per cent of the global gaming traffic, as per the latest numbers. And of course, investors have been quick to spot the trend. Investors including Sequoia Capital and Kalaari Capital have already increased their investments by 78% during 2020 to $173 million
Some of the big investments include $225 million investment in Dream11 (September 2020), $90 million in Mobile Premier League (November 2020), and $68 million in Nazara Technologies (January 2021).
According to a report by Inc. 42 smartphone users form an overwhelming 85 per cent of the industry, followed by PC users at 11 per cent and tablet users at 4 per cent. Given the internet penetration, affordable data packs and affordable smartphones, it is little surprise to see that data points to mobile gaming forming the majority of the gaming market growing at 15 per cent year-on-year for the past five years. Add to that a greater willingness to pay for services comes from improved disposable incomes at purchasing power parity (25 per cent over 2016 levels) and wider adoption of digital payments.
And it’s not just the gaming industry that’s profiting from its success, other related industries such as food delivery. For example, Newzoo found that 80 per cent of Indians consume food or drinks regularly while playing games. This information is critical for FMCG brands in developing their marketing strategy, who can then use these platforms to expand their target audience and build brand awareness.