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Last Updated : Dec 20, 2018 04:48 PM IST | Source:

Podcast | Digging Deeper - The explosion of mobile gaming in India

Online gamers in India are now spending more than one-hour gaming every day on average.

Moneycontrol Contributor @moneycontrolcom

Harish Puppala | Rakesh Sharma

Moneycontrol News

There was an interesting bit of news a couple of months back. India has emerged as one of the five biggest gaming markets in the world. I’m talking about mobile gaming. One Times of India article earlier this week shared data from the Mobile Marketing Association's Power of Mobile Gaming in India report which claimed that three out of four gamers in India play mobile games at least twice a day.

Online gamers in India - the kids and youngsters who seem to be playing PUBG, Fortnite, or even Carrom Pool perpetually - are now spending more than one hour gaming everyday on average. That’s a fair bit more than the average of 45 minutes that most Indian mobile users spend on video services like Netflix.

(Fun fact: The popularity of PUBG is so high that Vellore Institute of Technology issued a circular banning its students from playing the game on its campus. The circular claimed the game is “spoiling the entire atmosphere of the hostel” and has become an “addiction” for students.)

Also, all that gaming is eating into prime-time television viewing, because most of this gaming occurs between 7pm and midnight. I suppose many young people with smartphones are really not interested in Sreesanth’s temper tantrums on Big Boss or the never-ending travails that Indian television families face every night during the 7pm-11pm horror that is primetime. The report mentioned that India “...with over 250 million mobile one of the one of the top five gaming countries.”

But wait, gaming was for nerds and vacant people the last time anybody discussed it at a party or at work, right? I mean, it was great to have a PS4 or an Xbox One as a status thing, but not quite tres cool, no? “Oh yeah, I had a PS4 and played it for a month, but I don’t know where it is now.” Oh yeah, we believe you.

Anyway, gaming, circa 2018, is overwhelmingly associated with mobile phones - Android and iOS phones. Recall that Pokemon Go fiasco? It changed gaming for good. By good, I mean permanently, not for the better. Pokeman Go was, objectively speaking, terrible.

Mobile Gaming in India

Remember Farmville? That ridiculous SimCity-like game for Facebook that everybody was addicted to back around 2010? Oh come on, admit it, you were too - there’s no shame in it. Don’t worry - I’m not on Facebook, so I won’t know.

Farmville was co-created by Mark Skaggs, an American game producer. In 2015, the man who helped create the time-killing monster that was Farmville surprised everyone by quitting Zynga, the American social gaming giant to join Indian gaming studio Moonfrog Labs. He oversaw two Indian games -  Bahubali: The Game, based on the film Bahubali, and  Alia Bhatt: Star Life, a celebrity game. Venture Beat reported that the Bahubali game had more than 10 million downloads.

That should give you an indication of where gaming in India was headed three years ago. Before resigning earlier this year,he had written a guest column for about India’s gaming scene in December 2017. Skaggs had written, “Watching the gaming market open up in India is like watching history being made right in front of your eyes...the numbers are starting to tell the story in terms of smartphones, engagement times and downloads, other companies around the world are waking up to the Indian gaming “honey pot” as the place to be.”

After quitting in March 2018, he added, “The opportunity in India is even more clear than it was two years ago when I joined Moonfrog, and I’m still invested in their success going forward.”

Okay, admittedly, that sounds like a rhetorical “see y’all later” throwaway, but the idea that a man at the cutting edge of mobile and social gaming sees a huge opportunity for gaming in the Indian market is worth discussing a bit.

Forbes claimed in a report in March that, according to one survey, mobile gaming is part of daily lives of more than one-third of Indians — 40% men and 35% women play mobile games at least five days a week.

The catalyst for gaming in India was our old friend Pokemon. The augmented reality experience of Pokemon Go took the world by storm, as it did India. Too bad nobody ran into traffic and caused serious jams. 2018 has been a milestone year as India’s gaming community embraced blockbuster multiplayer games. Besides PUBG, another smash hit has been Ludo King, a mobile game based on the classic board game. It is the brainchild of Patna-born Vikash Jaiswal, and recorded over 180 million installations in 2018.

Rajesh Rao, CEO of Dhruva Interactive and Chair of India Game Developers Conference, claims, “...even the cheapest smartphone is a good gaming device and as a result, there is a massive growth in gaming in tier-2, tier-3 cities and rural areas.” He credits the game Ludo King for taking gaming from a ‘niche’ entertainment genre to a mainstream one, especially in the smaller towns of India. Rao says, “Gaming in India has been generally about young and tech savvy people, but now it is a mass market phenomena.”

While most larger cities in India have had dedicated gaming centre’s for a few years now, mobile gaming has caught on like wildfire in urban India, especially the big hits like PUBG and Fortnite. Jaipur now has a PUBG-themed restaurant while a couple from Pune had a PUBG-themed pre-wedding shoot. The groom was, of course, dressed like Playerunknown. Total alpha male right there. YouTube recently dropped its Rewind 2018 video, which was designed around the theme of Fortnite. Clearly, gaming is big. And India, with its massive population of young people, has taken to gaming in a big way.

Where there are many users, there will be much money

With a gaming market of 250 million, it was only a matter of time before funding showed up. ToI reported that, according to Venture Intelligence, a firm that tracks VC/PE investments, showed that 2018 saw private investment of $116 million new-age gaming startups compared to just $7 million of PE and VC funds that were invested in the sector in 2016.

Nazara Technologies, a mobile game publishing company, saw growth that mirrored increasing enthusiasm for competitive online gaming, or esports. It recently acquired a 55% stake in gaming solutions company Nodwin Gaming and plans to invest $20 million to develop esports over the next five years. Manish Agarwal, CEO of Nazara, said, “Indian esports market is picking up steam, with an estimated four million enthusiasts.”

The Economic Times reported more ore than 222 million active gamers have been spending an average of 42 minutes playing mobile games every day over five sessions in the country as of 2017. Rohit Sharma, founder of POKKT, a leading mobile video advertising platform in India, South East Asia, and MENA regions, said, “As much as 89% of all game revenues in India were generated by mobile games. These gamers are highly engaged; almost one-third play five days per week or more, and nearly 40% spend more than six hours per week playing mobile games.”

Several Asian gaming giants, including Tencent Games, are looking for investment opportunities in India. According to some experts, The rapid growth in India and Southeast Asia comes at a time when big mobile gaming markets such as the US and China are saturating.

Forbes reported that, besides Tencent, behemoths like Alibaba backed-Paytm, Youzu and Nazara investing in India’s gaming industry which is estimated to be worth over $890 million. With the demand for games on an upward curve, India now has more than 250 game development companies, compared to just 25 such companies in 2010. The industry is now seeing at least two startups coming up every month. Some estimates suggest that India's mobile games market will be worth $1.1 billion by 2020, and the number of users is projected to touch 628 million.

Last year, eGamers Arena, an esports startup that also runs Indian League Gaming, partnered with World Cyber Arena to host qualifiers in India for a championship held in China. Even Nvidia, an American gaming technology company, organized five GamerConnect symposiums across India. In January, U Cypher, promoted as the first multi-gaming platform on TV for esports, organized U Cypher Championship, in partnership with MTV, where teams competed for a prize pool of around $80,000.

Forbes has a theory for this explosion of gaming in India: The rise in the popularity of gaming is, at least partially, due to the increased accessibility that the public has to them. With the tap of a mobile phone screen, a user can download games onto his/her smart device. It’s common knowledge that the rise of mobile gaming is directly related to the rise in smartphone adoption in India. And with India expected to have approximately 530 million smartphone users this year, many game developers like Moon Frog, 99Games, PlaySimple and Mech Mocha are capitalizing on the growth in smartphone usage to expand their businesses.

Felix Manojh, founder of Flixy Games, a mobile game publisher that has partnered with Japanese game developers Axelmark and Tayutau, told Forbes, “Rising smartphone users created a stable marketplace for mobile gaming sector, as users are constantly on the lookout for new forms of entertainment...The market is growing with frictionless payments, cheap data charges and mobile phone prices, and localized content.”

Moneka Khurana, Country Head, MMA India, said, “The Indian market is already known to be a mobile-first economy. The fact that mobile gamers are on their devices twice a day or more, there is ample opportunity for marketers to get creative in the way they run their marketing strategy. Whether it’s through partnerships or simply putting in an algorithm to retarget customers, the potential for monetisation is huge.”

Hmm. Cheap phones, and cheap data. Sounds like he’s alluding to Reliance Jio. ET reported in August that Reliance Jio Infocomm’s disruptive entry into the telecom market, and the inevitable price cuts by incumbent telcos boosted the entire mobile app ecosystem in the country in 2017. Mobile games rode that wave and experienced a massive surge in usages.

We even have estimates and user profiles of the regular gamers who are pushing this phenomenal growth. In terms of the demographics, there are four distinct target groups — male 15+ ( a 38 million monthly audience), female 15+ (21.4 million users), mothers ( between the ages of 28 and 40) and kids ( between the ages of 3 and 12).

Analysts say that while male 15+ users spend 10-20 minutes per session playing mobile games per day across 4-5 sessions, female 15+ users and mothers play for about 8-12 minutes per session across seven sessions per day. Kids have an average session time of 10-15 minutes and they play 4-5 times a day.

While puzzles, quizzes, and word games are popular mobile game formats across all age groups, gamers in the 20-34 years age group are heavy users of action/adventure and racing games, followed closely by online betting, card games, or poker apps. Younger male gamers play games that are more action-oriented, while users older than 35 years prefer mental stimulation games. Wait, gamers older than 35?

Rohit Dadwal, Managing Director of MMA in Asia Pacific, told Dataquest in September, “While it is common to assume that gamers tend come from a younger generation, this research has proven otherwise, and removes the stereotypes of a typical gamer. By changing their perception of what a “gamer” is, marketers can tap into a relatively untouched space and reach out to a sea of customers.”

Where there’s a catch, there’s a way. Sometimes.

But it’s not all fun and games for these gaming companies. Every Indian business trend has a catch. For mobile gaming in India, that’s the reluctance of Indians to spend money.  Globally, gaming is one category where users do largest in-app purchases.. But Indian users are still shy of spending on games. Even with incredibly popular games like Candy Crush or Clash of Clans, less than 1% of daily active users make in-app purchases in India, which resulted in the game publishers opting for freemium model. Freemium is a popular pricing strategy  - a product or service is provided free of charge, but money is charged for additional features, services, or virtual or physical goods.

Sharma told ET, “There is a huge opportunity for a freemium model which creates advertising as monetisation medium for mobile gaming. The biggest ad form is rewarded videos, where a user can be asked to watch an advert instead of spending money. We have seen that users prefer to watch these rewarded videos.”

Experts also say that while advertising is small in mobile gaming in India, it is growing rapidly because gaming apps are agnostic to geography or language while having huge inventory. Sharma claimed that his company’s revenues increased 315% in the last three years, and expects it to double once again in the next fiscal. Dadwal said, “...Since 55% of gamers perceive ads to be more personalised on gaming platforms, there is a much higher level of acceptance...21% of Indian gamers are over 35 years of age. This means that the range of brands that can tap into the mobile gaming market is limitless.”

So there you have it. The big mobile gaming explosion in India is set to get bigger. And with India being declared the fastest growing economy in the world, and if we are fortunate enough to have any money left in the country after all the farm loan waivers, we could see the growth of new horizons, new industries and new avenues of growth.
First Published on Dec 20, 2018 04:48 pm
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