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The emerging ‘Gaming Industry’ in India

  • Category
    Economy
  • Published
    25th Apr, 2022

Context

Co-founder of Winzo App stated in a recent interview that the Gaming Industry in India is set to expand manifold and provide employment opportunities to many Indians.

Analysis

What is Gaming Industry?

  • It is an industryinvolved in the development, marketing, and monetization of video games.

How has the gaming industry faired in India in recent times?

  • Gaming industry clocked 40% growth in 2019–20, which made it one of the fastest-growing sunrise industries in India.
  • Net revenue of US$ 1.5 billion was generated by the gaming ecosystem during this period and the industry is expected to surpass US$ 5 billion by 2025.
  • In terms of user base, the Indian gaming industry recently overtook that of the US.
  • Mobile phones dominate the Indian gaming industry, with phone-based gaming apps accounting for 86% of total gaming apps in 2021.
  • Internet affordability and growing smartphone penetration in the country are indicative of bright prospects for the industry.

What are the Key drivers of Gaming Industry in India?

Smartphone penetration:

  • India has 2 million smartphone users, with smartphone penetration at 36.7%.
  • The above numbers are increasing at a very rapid pace in the country.
  • The use of smartphones has risen with the advent of more gaming-friendly handsets supported by faster processing capabilities.
  • For instance, the RAM in these smartphones has increased by three to four times in the last five years thus enhancing the gaming experience.
  • This is making access to gaming easy in India.

Affordable internet:

  • Internet access in India is very cheap.
  • This has led to heavy internet use amongst the mobile subscribers in the country.
  • This low-cost internet makes using gaming apps affordable to Indians.

Young demography of India:

  • India has a significant demographic advantage with 46% of its population under the age of 25 and 67% in the working class (ages 15–64). 
  • Demography is considered a major factor for growth in the gaming industry. 
  • In a survey conducted by KPMG, nearly 75–80% of the respondents between the age group of 18 to 36 reported playing at least one to three times a week. Fifty percentage of those in the age group of 37-50 respondent by stating that they were engaged in playing online games four times a week.

Introduction of new games with a shorter learning curve:

  • Indians are increasingly getting acquainted with new and more sophisticated games.
  • These new games have shorter learning curve and hence understanding them and then using them gets streamlined.

The Rise of Gaming Industry in India:

  • Gaming is the fastest-growingentertainment industry in India.
  • At present there are more than 15,000 game developers in the country. 
  • Various international studios such as Electronic Arts (EA), Ubisoft and Zynga have been setting up gaming development centres in India since early 2010 and have been groomed several gaming developers. 
  • The number of gaming companies increased nearly 10x since 2010, crossing 275 in 2020.
  • Investors are attracted by the boom in the Indian gaming industry, especially the Triple-A title games.
Triple-A Title Games: In the video-game industry, AAA (pronounced and sometimes written Triple-A) is an informal classification used to categorise games produced and distributed by a mid-sized or major publisher, which typically have higher development and marketing budgets than other tiers of games.
  • The meteoric rise in gaming has also benefited the individual content creator industry, contributing to its growth. 
  • There has also been increase in the subscribers of individual game streamers on YouTube. Thus creating an income opportunity for proficient gamers in India.
  • At present there are 920 gaming start-ups in India, with Mumbai being the headquarters for the top players in this domain. 

What initiatives have been taken by the Government of India to boost the domestic gaming industry?

  • It has set up the Animation, Visual Effects, Gaming and Comic (AVGC) Centre for Excellence in Collaboration with IIT Bombay.
  • Government of India has permitted 100% foreign direct investment (FDI) in gaming.
  • NITI Aayog had last year organised a consultation programme for industry participants to facilitate good governance, growth, and innovation in the gaming ecosystem.
  • India’s flagship programme, Digital India, has also helped the gaming industry to a certain extent.
  • The government’s Digital Village scheme is also aimed at boosting Internet usage in rural India and increasing smartphone penetration which will without any doubt increase the subscriber to the gaming platforms.
  • The Union Ministry of Education is working on policies to create job opportunities for students in online gaming and toys. India conducted the Smart India Hackathon to help students showcase their online gaming skills.
  • Data centre parks and related initiatives in the country are aimed at providing digital infrastructure for upcoming gaming companies.

Future of Gaming Industry in India:

  • The Indian gaming industry is set to be on a high growth trajectory, with rapid digitalisation and transformation, increasing internet usage and rising smartphone penetration. 
  • The domestic gaming industry is expected to create large number of direct and indirect jobs by 2023. 
  • In the following two years, it is expected to attract US$ 100 million in foreign direct investment(FDI). 
  • These factors indicate bright prospects for the industry. 
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