ReportLumikai Investment Advisors
Leveling Up: State of India Gaming FY'23
1 Oct 202312 pages~11 min full read
The Indian gaming market reached $3.1 billion in FY23 and is projected to grow at a 20% CAGR to $7.5 billion by FY28.
The player base grew 12% to 568 million users, with non-metro regions now accounting for 66% of the total demographic.
While the Real Money Gaming (RMG) sector grew 33% in FY23, future growth is expected to slow due to new GST and TDS regulations, which 60% of users believe will reduce their play frequency.
Non-real money gaming segments, specifically casual and midcore titles, are driving market expansion, evidenced by a 37% increase in in-app purchase revenue for non-RMG titles.
Engagement metrics remain robust, with average weekly play time increasing 20% to 10-12 hours and total annual downloads reaching 15.4 billion.
Despite a 75% decrease in venture capital funding during 2023, the government is actively supporting the industry through the recognition of esports and the creation of an AVGC taskforce to establish India as a global development hub.
The Indian gaming market demonstrated significant resilience in FY23, reaching a value of $3.1 billion with projections to hit $7.5 billion by FY28 at a 20% CAGR. This growth is increasingly driven by non-real money gaming (RMG) segments, specifically casual and midcore games, as in-app purchases and advertising revenues rise. While the RMG sector grew 33% in FY23, future growth is expected to be muted due to new tax policies and industry consolidation.
The player base expanded to 568 million gamers, a 12% year-on-year increase, with 25% identified as paying users. Engagement metrics are strong, with average time spent increasing by 20% to 10-12 hours per week. India remains a global leader in game downloads, recording 15.4 billion in FY23. Notably, monetization remained stable despite the suspension of major titles like BGMI and Free Fire, as in-app purchase revenue for other titles grew by 37%.
A survey of over 2,000 users reveals a 60:40 male-to-female ratio and a shift toward non-metro regions, which now account for 66% of gamers. Users are showing a higher propensity to experiment with new genres and pay for content, with 62% preferring UPI for transactions. However, 60% of users anticipate that new GST and TDS regulations will negatively impact their play frequency in the RMG segment.
The regulatory landscape is evolving with the government’s recognition of esports and the establishment of the AVGC taskforce to promote India as a global development hub. Although venture capital funding decreased by 75% in 2023, mirroring global trends, strategic investments from major international entities suggest long-term confidence in the ecosystem's digital infrastructure and development capabilities.
