BGMI's success led India in top 5 esports markets; more acquisitions on cards: Krafton India CEO

Battlegrounds Mobile India Series 2024.

Emotions were running high, fans were cheering relentlessly and commentators just couldn't keep calm. This is not a scene description of an Indian Premier League (IPL) match or the final of the recently concluded T20 World Cup 2024. This is how the gaming arena looked during the finale of Battlegrounds Mobile India series (BGIS), one of the most popular esports games in India.

The fanbase of esports is growing and the proof lies in its growing viewership which is estimated to have doubled to 57 million in FY24 from 25 million in FY22, according to industry estimates. So, it did not come as a surprise when fans at the BGIS event were excited to see their favorite esports stars, yearning to get autographs and selfies with their esports stars.

The scenes at BGIS were nothing less than the euphoria witnessed during the match day of a cricket or football game, signalling how multiplayer video games aka esports are making inroads into the space that belonged to  traditional sports. Esports is already a medal event in the Asian Games and the International Olympic Committee (IOC) will vote this month on the creation of new Olympic Esports Games.

Tournaments of top games like BGMI are being streamed and  their airtime on TV is increasing. Broadcasting hours of esports is expected to increase to 8,000 this year from 6,500 in 2023, according to Ey 2024 report. Average viewership is estimated to increase to 3 lakh in 2024 from 2.4 lakh last year. Number of platforms across TV, over the top (OTT) platforms and social media increased to 20 from 14 in the previous year.

Recently, Star Sports Network announced the acquisition of broadcasting rights for the Esports World Cup (EWC) 2024. In 2022, BGMI Masters became the first Esports franchise to be broadcast in India by the Star Sports Network, garnering millions of views.

The esports market in India is growing with game revenues increasing to Rs 1,200 crore from Rs 1,100 crore in the year before, as per the EY report.  Prize money across major tournaments increased to Rs 18.1 crore last year from Rs 15 crore in 2022. Prize money is expected to reach Rs 22 crore this year. Professional teams are also expected to increase to 35 this year from 22 in 2023. However,  brand interest has been low with number of brands investing increasing to 82 last year from 80 a year ago. This number is estimated to drop to 65 this year.

With esports market getting bigger in India, Moneycontrol sat down with  Sean Hyunil Sohn, CEO, Krafton India, the makers of popular esports game BGMI.

Where does India stand for Krafton in terms of user base as well as revenues?

In terms of strategic importance, India is at the top because of the size of the market and the potential upside. South Korea is five to seven times bigger than the India market just on mobile while China and the US are 20 times bigger. So, currently India is not a big market but it has the potential to grow and is the top market in terms of growth potential. Because of BGMI’s success in India, the country is within the top five markets in terms of revenue for Krafton.

What are your investment plans for India?

We have made investments of $160-170 million so far starting from Nodwin Gaming in February 2021. We have done over 10 start-up investments. We have done one investment this year which is unannounced and there are new investments in the discussion stage. We will continue to invest in India's gaming ecosystem and also largely tech sectors. We are also looking at acquiring opportunities of more mature companies and not just start-ups. We cannot announce anything in the near future because it is still in the early stages of the conversation but we will continue to invest in start-ups and growth stage firms. The acquisitions will be in gaming but looking at the size of the gaming industry in India we will also look at some other adjacent areas like the technology sector.

How was the reception for BGIS and how are you expanding in different  Indian markets?

On the first day of BGIS, audience attendance was 2,500 which dropped to 1,000 due to the T20 World Cup 2024. But on day three, attendance went up to 5,000. Attendance has been better than expectations. In terms of markets, we have a bigger user base in Mumbai where we see people waiting outside venues to walk in in case there was space to enter. We have had more people than we could accommodate in tournaments hosted in Mumbai. Hyderabad is also a fairly large market. Our next BMPS pro series will be in a smaller market. Last year we had events in Delhi, Mumbai and Ahmedabad each. We will have one event in a large city and one in a less tapped market.

What's your assessment of esports tournaments in India? Are more tournaments happening?

In the last three to four years, not just BGMI, the overall interest for esports has grown in the country. There are other publishers in the market who are doing esports on a continuous basis. Valorant is one of them, then there is Dota 2, Counter Strike which are mainly driven by third party organisers. There are other smaller and newer games which have come to India through local teams. For the last couple of years, things have stabalised in terms of tournaments. Like we have BGIS events for grassroots talent where players from tier II, III cities can step up into the national level. Then there is the BMPS pro series where we invite established teams that help the audience identify which are the best teams and players.

How is sponsorship revenue growth for esports events?

This time for BGIS we could only get IQOO (Consumer electronics company) on board. There was an issue in terms of onboarding sponsors. Our efforts to get sponsors started at a later stage so now we expect to see more sponsors coming to BMPS which will take place in the later half of this year. We will see more sponsors next year. We try to finalise our esports calendar well in advance so that we can have better conversations with sponsors. For BGIS 2024 I am not very happy with the number of sponsors. We are yet to improve. Brand sponsorship interest (for esports) is slow but there are third party events where there are repetitive sponsors such as AMD, LG, Hyundai. The pool is smaller so we need more efforts and education for the big brands to come in. OTT platforms are interested in getting esports content. So, with more exposure there will be more brand interest but it will take some time.

Are there any plans to launch more games for the Indian market?

We have one game to be launched in the later part of this year. It is a Korean developer made game but they are now making the localised version for the Indian market. There are a couple of more games in discussion which will launch this year or early next year. We will continue to launch more games for the Indian market. So far, there are five to six games that have been launched for the Indian market.

How is India's gaming talent in terms of players and developers faring?

India has good game developers who are generating sizeable revenue in India and and outside India as well but due to the short history of gaming in the country there is a bit of a gap. Our incubator programme wants to contribute and lead the upskilling of the industry. There is a lot of interest from fresh graduates who want to become game developers. But this talent is underserved because there are not many companies that can give them the opportunity to help them learn and offer them to work on real projects. We still need to have few more success stories in the industry so that they can hire a sizeable workforce. We are investing in new companies so that if they are successful there can be more opportunities for talent.

How are earnings of esports players and creators faring in India?

The top 10 creators make more than a $1 million in a year while the top 50 make $1,00,000-2,00,000 a year. And this will grow. If you look at global markets there is a creator called Mr Beast who is launching his own brands for snacks, drinks. This is going to happen in India as well. Creators are engaging with Bluetooth headset makers but they will get connected to consumer brands also. When this starts to happen then there will be ad revenue, sponsorship revenue and creators will also be build their own brands.

Are Indians paying to play games?

Paying propensity is getting  better in India but is still lower than the global average. Average revenue per user (ARPU) of successful games is encouraging as it is not very low. If a game is good enough then the ARPUs are sizeable. Indians are willing to spend. We have portfolio companies that have grown 10x in terms of revenue in the last 1-1.5 years. They used to make $1 million or lesser and now they make $10-20 million; that proves that Indian consumers are willing to spend. In many international markets, gaming is a priority however in India it is lower in the list when it comes to spending. In more mature markets, smaller games also make sizeable revenue, but in India it is concentrated in the top 10-20 games. So, the tails are not that fat which becomes an issue for small developers to sustain.

PUBG and BGMI bans were a setback. While BGMI made a comeback what kind of support do you expect from the Indian government?

The government has a focus and the right mind to grow the gaming industry. We are hearing from different ministries about a  centre of excellence for the gaming industry along with other industries. Central and most state governments are willing to provide support. Ministries know the key issues to regulate and govern the industry so there is an ongoing discussion on what to do and what is not needed. About esports and game development, the government has a clearer picture now. Some regulations might come in for the industry. But I am positive about the future of the gaming industry in India.