Online Gaming breaks out of its shell

The stereotype of the typical gamer — teenaged, unkempt and voluntarily locked up in a dim room in front of a PC — is no longer a truism. The rapid adoption of smartphones across age groups and steadily improving internet connectivity has given rise to a new segment of online gamers. These range across the age spectrum — from children playing on their parents’ smartphones to senior citizens — and have driven the online gaming segment to become the fastest growing in the media and entertainment sector.
For instance, according to a recent joint report by EY-FICCI, the online gaming segment in India grew by a whopping 59 per cent annually in 2018 going from Rs 3,040 crore in 2017 to Rs 4,850 crore. This is only expected to continue at a breakneck pace driven by the prodigious rise in the number of gamers, hitting Rs 12,030 crore by 2021. The number of online gamers, which grew 52 per cent in 2018, is expected to hit 340 million by 2021.

The primary driver for this rise in gamers in the Indian market is seen to be the spread of affordable smartphones, most of which sport enough computing power to run most mobile games. And those hooked enough to shell out money to pay for high-performance gaming smartphones are doing so too, with the percentage of such shipments among overall smartphones rising from 1.8 per cent in 2017 to 3.3 per cent in 2018. This share is expected to hit 6.5 per cent in 2021, according to EY-FICCI.

This willingness to pay for a good gaming experience is a major factor in why industry players have begun viewing the previously niche segment as one with potential for substantial earnings. “The gaming industry has seen an acceleration during the year along with overall macro economics helping growth in revenues and online gamers. We now also see an acceptance of gamers to pay and play leading to robust revenue growth for the industry,” said Manish Agarwal, CEO, Nazara Technologies, a Mumbai-based mobile games firm.

For instance, the report finds that 65 per cent of those who played real-money games, where players are expected to pay for games, are willing to pay over Rs 100 per session.

However, while real-time player vs player online games like PUBG are rising in popularity, and real money games see steady traction, the true market leaders in the segment are fantasy sports platforms. The number of sports fans in the country who played fantasy sports games in 2018 is estimated at 45-50 million in 2018. “For a sports fan, Fantasy Sports provides a platform to not only showcase their knowledge and skill amassed overtime, but also to receive recognition in the fantasy sports game. Fantasy sports is rapidly changing the way fans consume sports content, making the overall sports experience more exciting and engaging,” noted Harsh Jain, CEO and co-founder, Dream11, a fantasy sports platform that allows users to play fantasy cricket, hockey, football, kabaddi and basketball.

Going forward, the segment is set to see rapid increases in fantasy sports gamers (expected to cross 100 million by 2021) and player vs player games, while investment into the sector is also expected to grow. Gaming companies like Dream11 ($100 million), Nazara Technologies ($82 million), Ace2Three (US$76 million) and MoonFrog Labs ($16 million) have all been able to raise significant funding from venture capitalists so far. The advent of Virtual Reality and Augmented Reality gadgets is also expected to drive growth going forward.