Indian gaming biz growing at 41%, to be valued at $3.75 bn by 2024: Report

The industry has attracted $350 mn in investments from venture capital firms from 2014-2020

India’s online gaming industry has attracted about $350 million in investments from venture capital firms from 2014-2020, and by 2024, is set to be valued at $3.75 billion, according to a new report. 

According to a report “Gaming–India Story” released by boutique investment bank Maple Capital Advisors, the investment in the industry is expanding at a compound annual growth rate of 22 per cent and is currently valued at $930 million. The bank expects the industry to grow at 41 per cent annually due to the growth of digital infrastructure and substantial rise in quality and engaging gaming content.
 

The current lockdown in the country has also given a renewed push to gaming, with consumption growing at least 20-30 per cent despite significant impact on live sports, a big driver of fantasy sports gaming.

"With growing internet penetration, compelling economics, usage statistics and increasing ecosystem of entrepreneurs and developers focusing on this space we expect good growth in investments which are likely to at least double in this space in the next 1-2 years. Marquee venture capitalists have begun meaningful investments and its likely that private equity will enter gaming in a more meaningful way going forward. We also expect select consolidation by larger platforms to add categories and fill gaps," said Pankaj Karna, founder and MD - Maple Capital Advisors.

There are three main categories of gaming in India- real money games (RMG), mobile centric or casual games and E-sports. There are 300 million online gamers in India, and the number is expected to grow at 47 per cent by 2022. 

The top online games in India are Teen Patti, Coin Master, 8 Ball Pool, Teen Patti Gold, PUBG Mobile and Candy Crush Saga. The key e-sports based gaming firms are Dream11, MPL, MyTeam11, Halaplay and 11wickets. Key RMG players include Ace2Three, RummyCircle, Adda52, Pokerbaazi, and Pocket52. Main gaming platforms are Games2win, Moonfrog Labs, Junglee Games, 99games, and Nazara Technologies. 

There are over 400 gaming startups in India and the number of fantasy sports operators have increased by 7x over 2016-2018, whereas the number of users has grown by over 25x from June 2016 to February 2019. E-sports has also shown strong user gorwth but lags in profitability. Real Money games have shown substantial growth and profitability and are now ready for diversification, the report has found. 

The key trends in the Indian gaming space are multi player formats increasing, investors showing more interest in Indian gaming startups, more and more people considering gaming as a career and increase in consumption and creation of local Indian gaming content. 

The impact of Covid-19 related lockdown has been different for different gaming fimrs. "Between the weeks of Feb 10-16, 2020 and March 16-22, 2020, visits to online gaming websites or apps

increased by 24 per cent. Engagement, as measured by time spent on gaming sites or apps, increased by 21% during the same time period," the report found. 

It added that fantasy sports gaming players like Dream11, MPL and others have seen a major hit due to curb of IPL and other live sporting events.

Key trends to watch out for:

- Mobile games likely to dominate gaming arena

- In-app purchases on gaming platforms are also set to rise

- Tier-2 and tier-3 cities are promising 

- In addition to multiplayer gaming, localised games are likely to start picking up pace

- Post Covid, fantasy sports likely to pick up and probably will attract more games

- Investments in the space will likely double in next two years