India will be among the top countries in terms of consumers spending money on gaming over the next four to five years, says Nitish Mittersain, Founder and Joint Managing Director of Nazara Technologies.
For years, India has been one of the biggest markets for mobile game downloads on Google Play and Apple App Store. However, it has lagged significantly in terms of user spending. But Mittersain says that will soon change.
"If you talk to youngsters today, even a 10-year-old kid, their whole life is evolving around gaming, eSports, and watching game influencers on YouTube. So as the next generation comes in… India will scale up in terms of becoming maybe a top five, top three country in terms of spending over the next four-five years" he said in a conversation with Anuradha SenGupta in an episode of the 'Life After Listing' show.
Mittersain said the consumption versus monetisation gap is largely because India is a mobile-first gaming country, unlike a lot of international markets such as the United States, China or Korea, where consumer habits later evolved and they got into the habit of spending on games.
"In India, because it was a mobile-first gaming country, all the consumers were very casual in nature initially. Now they are evolving and better quality games are available. The spending curve is starting to pick up already… But even in normal gaming, freemium gaming, etc., the spending is starting to increase," he said.
A key reason for this change is that the gaming habits of consumers are maturing and they are moving beyond casual games to those that offer deeper experiences or provide them a way to socialise with their friends and family.
India's gaming sector has witnessed an unprecedented growth in terms of app downloads and revenue on the back of pandemic-induced home confinement in the past couple of years. The overall gaming market was estimated to be at Rs 13,600 crore for the financial year 2021 and is expected to touch Rs 29,000 crore by financial year 2025, according to a recent KPMG report.
During the show, Nazara Technologies Chief Executive Officer Manish Agarwal said it is a "beautiful golden decade" for gaming. "Within that, there are many other business models that are emerging. Some are already very visible like eSports. I believe what you saw in IPL auctions, seven years forward, you will see in eSports auctions," he said.
"That's the viewership of the finals of eSports tournaments happening today. It's almost getting bigger and coming closer to the IPL matches. So, it's already happening today, when India is still a very nascent gaming market," Agarwal added.
In the recently concluded media rights auction for the Indian Premier League (IPL), The Board of Control for Cricket in India had raised a record Rs 48,390 crore for the 2023-2027 period, a near-three-fold increase from Rs 16,347 crore it earned for the 2018-2022 period. This also made IPL among the most valued sporting leagues in the world in terms of per match value.
Agarwal also said that "a huge amount of growth" is going to happen in the skill gaming market — also known as play-to-earn or play-to-participate — which has been growing very fast in India and will continue to grow because "it's still 20-30 percent penetration of gaming."
"For our portfolio, it's 4 percent (of our revenues). As the statutory clarities keep moving from black to white in the continuum, we will also get more and more comfortable in doing more capital allocation," he said.
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