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The overall online casual gaming sub-segment in India stood at a size of INR 60 billion in FY21 and is projected to grow at a CAGR of 29% over FY21-25 to reach a size of INR 169 billion, according to KPMG India’s ‘Beyond the tipping point – A primer on Casual gaming in India’ report released today.
It stated that during Q1-Q3 2020, the casual mobile gaming sub-segment downloads stood at 7.3 billion, accounting for 17% of the global mobile game downloads. The monthly active users for the top 100 mobile games and the time spent on online gaming, are higher by 10-15% post lockdown 2020.
The added features of online gaming such as multiple titles getting multiplayer features, with a social layer to them encouraged group consumption.
The study also suggests that the second wave of the Covid-19 pandemic, digital infrastructure and the continued investments by Indian and global developers and publishers will lead online casual gaming to continue being robust.
Below are some of the key highlights from the report:
Potential of India’s online gaming ecosystem
- The online gaming segment was estimated at INR 136 billion in FY21 and is projected to grow at a CAGR of 21 per cent over FY21-FY25 to reach a size of INR 290 billion.
- The online casual gaming sub-segment in FY21 accounted for 97 per cent of the total gamers and is expected to maintain this share by FY25.
- The segment is under indexed on monetisation with lower ARPUs (Average Revenue Per Unit), as compared to markets in Indonesia, Malaysia and South Africa.
Growth Drivers
- Increased smartphone and internet penetration, young population and adoption of digital payments.
- Overall growth in digital consumption.
- Increase in supply of world class titles, games with localised content, new features and an increase in investor interest.
- Covid-19 induced lockdowns in 2020.
Challenges faced
- Low average revenue per paying user (ARPPU).
- Lack of scale for Indian studios.
Advertisement based monetisation
- Free to play games dominate consumption in India.
- Developers and publishers dependant on tools such as rewarded/incentivized ads.
- Advertisers and brands aim to use online casual gaming to reach their intended target audiences.
Consumer spends to evolve
- Consumer spends, led by In App purchases (IAPs) are likely to see strong growth in the next 3-4 years.
- Pricing of IAPs adjusted to Purchasing Power Parity (PPP), localisation of content, social aspects of gaming will help online casual gaming see an improved traction.
Key evolving themes
- Cloud gaming: Cloud gaming takes device capabilities out of the picture. This will help the Indian market, which has a limited capacity to invest in hardware.
- Esports: The India esports sub-segment is expected to grow by CAGR 27% over FY21-25, to reach a size of INR 5.7 billion due to increased interest from brands for sponsorship, publishers to promote games and entry of new players.
Artificial Intelligence
- AI is being extensively used across game development, to create player engagement, interactive experiences and personalisation.
Satya Easwaran, partner and head of technology, media and telecom, KPMG India, said, “Our report aims to simplify the multilayered ecosystem of the world’s second largest online casual gaming user geography. Poised at a 3x growth in revenues between FY21-25, we have been privy to the keen interest from corporates and investors who want to ride the incredible wave of opportunity that the business of online casual gaming has to offer.”
He added, “Having seen rapid growth in the last five years on account of the growth in digital infrastructure in the country coupled with the availability of leading titles, India’s online gaming segment is now a serious business with India’s gaming market being overwhelmingly mobile first.”
Girish Menon, partner and head, media and entertainment, KPMG in India, said, “The online casual gaming sub-segment in India has emerged as the largest in terms of consumption amongst overall online gaming, with close to 420 million gamers engaging in online casual gaming in FY21”.
Menon added, “Online casual gaming saw its tipping point in 2020, with consumption and engagement at an all time high. The growth potential of this sub-segment is immense, with improve monetisation helping the growth of the developer and publisher ecosystem, resulting in the likely emergence of players of scale. Both consumer spends and advertising based monetisation, which is unique to India, are likely to see strong traction, with India’s movement up the maturity curve and , supply of world class titles, the uptake of rewarded/incentivised ads and localisation of gaming titles being the key enablers. Further, with the emergence of ecosystem enablers such esports and game streaming, online casual gaming is likely to appeal to the masses and professionals alike.”
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