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Online Gaming: The Next Level

15 JUN 2018

Intelligence & Insights – India

India’s online gaming industry, still in its infancy, is primed for a steep growth curve. The industry, already benefiting from increasingly robust broadband and payment infrastructure, is set to hit the mainstream with lead incumbent Nazara’s Rs10 bil./US$154 mil. public offering taking place this year. This should pique more interest from institutional investors, which have already started to place early-stage bets. At the same time, there has been a rise in interest from global strategics with Chinese internet major Tencent hiring senior executives to lead its India foray and Alibaba entering the market through Paytm. In this issue, MPA takes a deep-dive into India’s dynamic online gaming market exploring key consumption trends, business models and market opportunities in this rapidly
emerging segment.

Research & Report Highlight:

  1. Exponential Growth Of Online Gaming: Projections from MPA show the sector expanding from a US$400 mil. industry in 2017 to a US$1.2 bil. revenue opportunity by 2022, a 32% CAGR.
  2. Rising Investor Interest: Online gaming’s long-term Indian opportunity is attracting international and domestic capital, with activity picking up over the last 12 months.
  3. Local Startups Join The Fray:  Although global players continue to rule India’s casual gaming scene with international titles, the number of local publishers and developers has risen 10x from a meagre 25-30 at the start of the decade.
  4. Significance Of Localization: Domestic games companies are also gaining ground by bringing in an element of localization, which can drive reach and engagement.
  5. RMG Business Economics:  Real money gaming companies tend to operate on a service fee model, retaining a portion of the entry fee (typically 5-15%) while distributing the rest as winnings.
  6. India’s Take On Regulatory Hurdles:  Leading RMG incumbents are also collaborating with the All India Gaming Federation (AIGF), a gaming industry apex body promoting self-regulation among RMG stakeholders in India. Established in 2016, AIGF has worked with policy makers to promote the economic benefits of a well-developed gaming ecosystem.
  7. Emerging Segments: India’s nascent e-sports industry is also attracting investment from credible strategics such as UCypher, Nazara and COBX Gaming, which should help accelerate sector growth.

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