Monetisation is at a very nascent stage in India’s $1.5-billion mobile gaming sector but it shows the potential to reach $5 billion by 2025, according to a recent study.
An average mobile gamer in India spent $3-10 in 2020, as compared to $57-66 spent by a mobile gamer in China and $73-77 by a gamer in the United States, said the report by Sequoia India and the Boston Consulting Group. This does not include real-money gaming (RMG) spends and was adjusted for purchasing power parity for 2020.
The report noted that there is a massive growth opportunity in the sector in India, since only 46 percent of Indians were connected to the internet in 2020, as against 60 percent in China and 89 percent in the US. Also, only 22 percent of the population has played at least one mobile game as of 2020, compared with 45 percent in China and 52 percent in the US.
This opportunity is also attracting investors to the sector. India’s gaming sector has bagged $549 million funding in the first quarter of 2021 – up from $412 million in 2020 and $175 million in 2019.
Gaming grows faster than social media
With a 39 percent compound annual growth rate (CAGR) in FY20, the gaming sector is growing faster than most media sub-sectors in India, including social media with 11 percent CAGR and video streaming with 26 percent CAGR.
The rapid growth comes on the back of mobile-first games that account for 86 percent of the country’s gaming market. The corresponding figures for China and the US stand at 59 percent and 28 percent.
That said, India’s $1.8-billion gaming market accounted for only 1 percent of the global gaming pie in 2020. The market size in China was more than $45 billion and over $40 billion in the US.
About 7-8 percent non-RMG gamers pay
India has over 300 million active gamers and the mobile gaming market clocked revenues of $1.5 billion in 2020, which is set to touch $5 billion by 2025, the report said.
About 7-8 percent of the non-RMG gamers are paying customers, of which 90 percent of the revenues comes from the top 20 apps. RMG has 15-20 percent of paying users. The growth in the paid gamer base along with higher average revenue per paying user is expected to provide momentum to industry revenues, the report said.
Some of the measures that are being taken to improve user monetisation include an expanded suite of payment options like UPI, sachet pricing to facilitate trials, and in-game digital goods purchases.
“We believe that there is a huge depth of opportunity in gaming studios, social gaming, new avatars of RMG and crypto gaming. The India gaming story is just in its first innings and we will see many massive companies emerge over the next 5-10 years,” said Prachi Pawar and Pushpak Kedia of Sequoia India.
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