India Reaches Revenue of Rs 220 Bn in 2023 with 22% Growth

India’s gaming industry has achieved a key landmark in 2023 by achieving Rs. 220 billion of revenue which is a remarkable 22% growth from the previous year. This strong increase underpins the industry’s potential and changing role within the wider media and entertainment sector. The industry’s growth trajectory is supported by several factors; these include rising popularity of transaction-based games, casual games, esports, skill-based games like rummy games and technological advancements.

In 2023, transaction-based games accounted for Rs. 182 billion (83%) while casual games and e-sports contributed Rs. 38 billion (17%).

A huge leap in the sales of transaction-based game has been influenced greatly by increased interest in real-money games including games like Rummy game. According to the EY-LOCO gamer survey, 58% of respondents were willing to spend funds to play real-money games, and 52% had paid to play fantasy sports in 2023. This financial commitment to gaming has consequently boosted revenues in this area. Furthermore, famous titles such as Battlegrounds Mobile India have re-introduced themselves which fuelled the growth of transaction-based games.

There is also a significant role played by casual and hyper-casual games in the rise of industry. In 2023, these were the most downloaded games with few in-app sales but high playability levels. For instance, casual game platform strategies enhance customer loyalty and lifetime value as players spend longer durations on these platforms. It can be seen in higher revenues from in-app purchases as well as increased number of gamers from non-metro regions.

Esports, too, have seen a substantial increase in participation and viewership. With multiplayer games making a comeback, prominent esports titles nearly doubled in 2023, with 1.8 million Indians participating. The growth in esports is further evidenced by a 20% to 25% increase in viewership, particularly in Tier-II cities. The EY-Loco gamer survey indicated that 78% of respondents had participated in esports events, highlighting the sector's expanding footprint.

The growth of the gaming industry in 2023 has been driven by factors such as increased smartphone penetration, cheaper data costs, rising GDP per capita, influence of gaming influencers and rise of platforms such as social media.

Improved technology has been vital in improving the gaming experience for users. Incorporating technologies like Augmented Reality (AR), Virtual Reality (VR), and blockchain have transformed gaming landscape. These technologies have enhanced game quality and introduced new income streams through selling within applications and advertising opportunities.

India’s cheap mobile data rates make it one of the most appealing gaming markets. According to a study, a gigabyte of data costs about less than Rs. 20, which is quite affordable for Indian consumers. This affordability has resulted in increased internet usage, with 46% of the population regularly using the internet, thus driving the growth of mobile gaming.

The overemphasis of the governmental role in shaping the gaming sector cannot be doubted. The idea behind Digital India by Prime Minister Modi has prompted developers and innovators to lead the online gaming industry. The creation of Inter-Ministerial Task Force (IMTF) and recommendations for national level legislation governing online games are just a way towards establishing a favourable environment that stimulates growth.

Challenges have come their way since 28% GST was imposed on all betting starting in October 2023. Despite some firms taking up traffic-keeping measures, smaller gaming companies struggled, thus necessitating closures or sales. The gaming industry is optimistic that clarification on retrospective tax will revive Foreign Direct Investment (FDI) and sustain growth.

The Indian Gaming industry is expected to hit Rs. 388 billion by 2026, spurred by an increased number of smartphone users, better IT infrastructure and higher per capita income.

Smartphone users will grow from 574 million to 640 million in the next ten years as wired broadband expands from 38 million to 68 million. This rise will amplify the gaming experience and increase user engagement in online games.

In-app purchases are estimated to expand at a CAGR of 27% with high fantasy sports, rummy games, poker among others. Real-money games are projected to grip an income share of about 83%. The reintroduction of games like FreeFire and approval for skill games in states such as Andhra Pradesh and Telangana will accelerate the company’s growth.

Market consolidation has resulted from GST regulation impacts making small companies merge or exit. This trend will stabilize the market and attract international interest once retrospective taxation issues are settled.

Inflow of foreign games into Indian market will enhance game development as well as management. And also, there will be an increase in the number of alternative models for subscriptions and in-app purchases, along with the WEB3 technologies integration. Thirty per cent of India's 450 WEB3 businesses are in gaming, with USD 400 million in recent investments.

In 2023, India’s gaming industry made a solid showing by hitting revenues worth Rs. 220 billion meaning year-on-year growth at 22%. The growth will likely continue as it is given that transactional based games like online rummy which are played on rummy app, casual games and e-sports leading the way. The future of the sector seems bright due to technological advancements, government efforts as well as growing number of smartphone users. In the next few years, India’s gaming industry could become a global leader given stabilizing regulatory environment and increasing international interest.