Over the last fortnight some of Bollywood's biggest stars, including Salman Khan, Ajay Devgn, and Jacqueline Fernandez, have all jumped on board as brand ambassadors for various gaming companies. Adding to the buzz, two new gaming companies have been launched in the past two days alone. The gaming industry in India is thriving and this perfect storm has caught the attention of many new-age entrepreneurs and start-up founders who are leveraging this opportunity to tap into the rapidly expanding market.
In 2017, the number of gaming companies in India was approximately 30. However, this number had increased to 275 by 2019. Then in 2020, the pandemic struck, resulting in a surge in demand for digital entertainment and consequent growth of the gaming industry. As per Lumikai’s recent report, India's gaming market stood at $2.6 billion in 2022 and is expected to grow at a CAGR of 27 percent to touch $8.6 billion by 2027. As a result, by 2021, the number of gaming businesses in India had surpassed 500, and by 2022, it had exceeded 900. The number will continue to rise this year said experts.
Is there space for more?
Justin Shriram Keeling, founding general partner at gaming and interactive media fund Lumikai explains the demand-supply dynamics.
“This year over 507 million gamers in India downloaded over 15 billion gaming apps — user demand is unprecedented. Monetization is also growing quickly, with Indian gaming the Average Revenue Per Paying User (ARPPUs) is up 25 percent this year, and over two million paying gamers are coming online every month. That’s a lot if white space to build in and we’re seeing plenty of founders waking up to that,” he says.
India’s gaming market has seen sustained tail winds for several years now, and this has accelerated over the last two years.
“Founders have taken notice. India is also home to some of the world’s biggest gaming companies who have set up local operations in the country. That provides a strong talent pool of future founders and teams,” Keeling says.
Mixed bag talent pool
Talking of the talent pool, Manish Agarwal, the former CEO of Nazara Technologies, has joined forces with angel investor Ishank Gupta to establish Kratos Studios, a Web3 gaming startup that has secured Rs 160 crore at a valuation of Rs 1200 crore in financing. The seed round was led by Accel, with participation from investors including Prosus Ventures, Courtside Ventures, Nexus Venture Partners, Nazara and others.
However, the gaming industry in India is not just dominated by IT professionals with experience in gaming. It is a mixed bag, with entrepreneurs from different backgrounds venturing into the space. Indian cricketer Deepak Chahar is an example. Chahar recently turned entrepreneur with the announcement of his fantasy platform TFG just this week.
Chahar is banking on his fan base to build reach and engagement for his platform and chose the pre-IPL months for a timely launch.
“With my 5 million fanbase, it seemed like a perfect way to reach out to them and leverage them by extending ourselves in the cricket gaming arena through this fantasy game. This is the right time for the launch as we will get a chance to cover the cricket season that awaits us ahead and we are all geared up to take our plunge into this ocean of fantasy sports and the gaming ecosystem,” he says.
Using his knowledge and experience in the sport, Chahar is targeting to have a product that sets itself apart from the existing platforms in the space.
The diversity in these entrepreneurs doesn’t end here.
Content creators and gamers are also joining the bandwagon. Those who aren’t starting their own businesses are turning entrepreneurs.
Creators turn entrepreneurs in gaming
Earlier this month, YouTuber CarryMinati, who is also a gaming influencer, partnered with his longtime business associate Deepak Char to become equity partners in Big Bang Esports Pvt. Ltd., the e-sports division of Big Bang Media Ventures.
“E-sports enjoys the potentiality of transforming the creator economy, building borderless communities and bolstering economic growth. The growth of esports in India has been phenomenal in recent years, and this boom will only gain momentum with more vigour and pace in the coming few years,” he said at the time of the official announcement.
As new companies continue to emerge, some established ones are opting to broaden their offerings by launching new entities. One such example is Glance, which recently introduced Nostra. Yashashvi Takallapalli, the vice president and general manager of Nostra, explained that their goal was to expand the brand's reach globally. They aim to achieve this by diversifying their distribution strategy and forming strategic partnerships, with a goal of attaining 200 million active users by December 2024.
“Our vision is to create an independent, single-largest game discovery platform in the world that offers disruptive gaming experiences for users. It was crucial to create an independent brand in the form of Nostra, for gaming enthusiasts globally and be able to offer unique experiences across discover, play, watch and compete,” says Takallapalli.
Nostra is a gaming destination by consumer technology company Glance, which is a smart lock screen platform that provides live content across gaming, entertainment, sports and current events among others. The company is an unconsolidated subsidiary of InMobi Group and is funded by Google, Mithril Capital and Jio Platforms.
So what's the bottom line for what investors are looking for?
Keeling explains what investors look for in ventures and entrepreneurs they invest in. “We typically look for founders that either have experiences building, shipping and managing games and products at scale, or a unique set of insights into a demographic market where there are opportunities for growth across the gaming stack."