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Indian mobile gaming industry will grow to $ 5+ billion by 2025: BCG-Sequoia India report

The report probes the evolution of Indian mobile gaming in terms of genres, engagement, and monetisation

The gaming sector in India is growing faster than most of the media sub-sectors, including, cinema, home entertainment, audio and more, and is generating US$ 1.5 billion in revenue. This is expected to triple to US$ 5 billion by 2025, riding on the back of the ‘mobile first’ phenomenon, as per a report by Sequoia India prepared in partnership with Boston Consultancy Group (BCG).

The report titled ‘Mobile Gaming: $5B+ Market Opportunity’ probes the evolution of Indian mobile gaming in terms of genres, engagement, and monetisation.

However, it should be noted that the Indian gaming industry is smaller than that of USA and China and constitutes just 1% of the global gaming market.

“The gaming industry in India has seen a growth of almost 40% in 2019-20, more than that of OTT, television and social media platforms. 86% of this market consists of mobile phone users. While there is large dependence on ad revenues today, increasing traction and engagement is expected to drive higher willingness to pay which will drive new ways of user monetisation and rising ARPUs in the coming years”, said BCG Managing Director and Senior Partner, Vikash Jain.

The report also highlights how India is emerging as both an investment opportunity and a talent hub for the world.

Rajan Anandan, Managing Director, Sequoia India, said, “Monetisation of Indian games, which has been a concern in the past, is already at US$ 1.8 billion, revenues are ramping very rapidly. The industry is witnessing a significant investor interest in Indian gaming. In fact, a third of all the funding for gaming in India came in the first quarter of 2021. The rise of gaming platforms is especially exciting, as is evident by 80% of all funding going to platforms.”

The consumer survey conducted by BCG as part of this report, gathered inputs from 3200+ respondents across 21 locations in India.

BCG Managing Director and Partner, Mandeep Kohli said, “The Indian gamer is not defined by their demographic. They are rather defined by their context – their needs, preferences, and gaming habits. An average player who plays to avoid boredom may spend around 1-2 hours on games, while a die-hard gamer who plays for the competitive spirit, can spend nearly double the time on gaming while playing the same game or a different game all together. Companies that are able to understand these varied consumers and identify which ones are they really serving are the ones which will lead the market”

For the stakeholders, the report highlights key points that will drive the next wave of growth for the industry. These include, enhancing the discovery and adoption through casual and free to play games, improving usage and retention by diversifying genres to increase engagement and retention, and effectively driving monetisation through localised pricing strategies, among others.

“80%+ of the mobile gaming market is driven by user spends, i.e., in-app purchases and real-money games, further catalysed by wide availability of quality smartphones, affordable internet and UPI,” said Prachi Pawar, Associate, Sequoia India.

The report also dives deep into the strategic choices made by some of the most successful mobile gaming companies in India — Nazara, MPL, Dream11 and Gameskraft.

“Being the first movers in their respective segments, some of these companies have helped shape the Indian gaming market. They continue to bet on new growth opportunities and build competitive advantage to stay ahead in this high-stakes game,” said BCG Principal, Wamika Mimani.

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