The years spanning from 2020 to 2024 witnessed a monumental surge in the online gaming sector, catalyzed by the global pandemic, as individuals sought solace in digital entertainment avenues. This surge, predominantly embraced by the youth and male demographics, not only provided a source of entertainment but also fostered a sense of community engagement.
According to EY's 'New Frontiers: Navigating the Evolving Landscape for Online Gaming in India' report, the online gaming segment in India experienced remarkable growth, boasting a notable compound annual growth rate (CAGR) of 28% from FY20 to FY23. This surge culminated in a market size of ₹16,428 crore in FY23, with industry estimates projecting a further increase to ₹33,243 crore by FY28, showcasing a 15% CAGR.
Moreover, the report highlighted India's substantial gaming community, comprising 42.5 crore gamers, the second-largest globally after China. This burgeoning segment attracted significant investments totaling ₹22,931 crore between FY20 and FY24 from both domestic and foreign sources. Additionally, the online gaming industry directly and indirectly employed approximately one lakh individuals, with projections indicating a potential expansion to 250,000 job opportunities by 2025.
Despite its rapid ascent, India’s online gaming segment currently represents a mere 1.1% of the global online gaming revenue, according to the report.
Raghav Anand, partner and leader of digital, new media, and convergence at EY Parthenon, emphasized the significance of advertisement-led monetization in India, particularly within the Real Money Gaming (RMG) segment. He noted the industry's potential for global recognition as both a consumption hub and a monetization epicenter in the coming years, fueled by factors such as the anticipated increase in supply of world-class titles, the advent of cloud gaming, and the expanding scale of game development studios.
In a significant development, the online gaming industry collectively signed a voluntary 'Code of Ethics for Online Gaming Industries' at the Indian Gaming Convention (IGC). This initiative, organized by the Internet and Mobile Association of India (IAMAI), the Federation of Indian Fantasy Sports (FIFS), and the E-Gaming Federation (EGF), aims to promote a safe, trusted, and accountable digital gaming industry with a focus on user protection.
Recognizing the industry's potential and challenges, the government has been actively working on forming regulatory mechanisms to ensure responsible and sustainable growth while safeguarding consumer interests. Interim measures, such as age verification, session timeouts, and financial transparency, are being suggested by industry leaders to address addiction and promote responsible gaming practices.
Anurag Saxena, CEO of the E-Gaming Federation, emphasized the importance of a united front from the industry in engaging with regulators and the government to establish clear and comprehensive regulations. He stressed the need for regulatory clarity to unlock the industry's full potential and facilitate rapid scalability.
As the online gaming sector gears up for the future, stability in regulatory and legal frameworks becomes paramount for sustained growth and innovation. Uncertainties surrounding regulations have the potential to impede the industry's progress, underscoring the need for proactive engagement and collaboration between industry stakeholders and regulatory bodies.
