Rising Investments In The Online Gaming Industry

India’s Online Gaming Industry And Rising Investments

Business Finance

The online gaming industry in India is no longer child’s play. This industry has emerged as one of the fastest-growing industries in India. After the Covid-19 pandemic, the gaming sector reached record-high levels of gaming audience and players. Growing at a rapid pace, the online gaming industry gives birth to some of the most profitable startups in India including Dream 11, Games2Win, 99 Games, MPL, Games24x7 and many more. 

The fast-paced growth and rapid evolution of India’s online gaming industry strike the attention of investors not just only in India but also abroad. Providing a huge scope for investors to earn a good ROI, the gaming industry unlocks the next level of growth. The future looks promising for the industry as some renowned investors such as Tencent, Sequoia Capital, Dream Incubator Inc, Neoplux, Kalaari Capital, AET Fund and many others made generous in the gaming sector. 

Interesting Facts About Online Gaming Industry 

  • Indians spent an average of 8.5 hours per week on mobile games.
  • The gaming industry has three unicorns; Dream11, Games24x7 and Mobile Premier League (MPL).
  • Gaming is the 4th largest sub-sector of the Media & entertainment industry.
Online Gaming Industry
Source: Hindustan Times

Market Overview

Shattering the glass ceiling of the domestic gaming industry, the industry is experiencing a massive surge in revenue and users in the last few years. Attracting new traffic from gamers in the industry, the Indian gaming market crossed $2.6 billion in FY  2022. And it is further expected to grow by a CAGR (Compound Annual Growth Rate) of 27% and reach $8.6 billion in FY 2027. 

According to the reports by Lumikai, the growth of the online gaming industry is driven by a rising gamer base, an increase in conversion of paid users on the platform and the sophistication of the gamer in India. (Lumikai is India’s first gaming and interactive media fund).  

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Online Gaming Industry Level Up Its Funding Game

According to the reports, an online game, Free Fire is currently leading the race of online games with an average of 109 minutes spent per user per day. The revenue of the gaming company grew per paying user by 11% and reached $20 per year. Also, Free Fire reportedly adds 2 million new paying users every month. These numbers are itself stating the audience’s growing inclination toward online gaming. And these growing numbers excite investors and venture capitalists to invest in the gaming industry.  

The other reason for investors’ rising interest in the gaming industry is the sustained momentum with which the industry has been accelerating its growth. The era of digitalisation, investment growth and a larger prize pool are the key driving forces of the industry that build a wide marketplace for the gaming opportunity.

With the increase increasing popularity, the online gaming industry has included new and innovative ways of payment methods in its in-app purchases revenue model of real money gaming and NFT-based gaming. These real-money gaming formats are levelling up the gaming experience of casino games, fantasy sports, regulated sports and others. An opportunity to capitalise on these real money games is making the industry a profitable asset for investors.

In the last 18 months, the gaming industry has seen three startups entering the unicorn club of India, two M&A deals with a combined value of $600 million and one successful IPO. With sustained capital investment and liquidity outcomes valuing over $150 million, the gaming industry in India becomes the topic of discussion among all entrepreneurs and investors for all the right reasons. 

Final Words

Gone are the days when the gaming industry was seen as something related to gambling. The high-end technology, large pool size and growing investment opportunity show that there is a huge potential in the online gaming industry. The industry still has many areas that are unexplored. Investors and entrepreneurs can utilise these opportunities in their favour and capitalise on the prospect given by the online gaming industry.

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