THE ONLINE PLAYBOOK

The country's e-gaming industry has seen phenomenal growth in recent times, despite battling several challenges. What lies ahead?

- By Manoj Sharma

TWENTY-FIVE YEARS AGO, being a gamer in India meant being caught in a time warp. The most common game ‘system’ was usually a Chinese knockoff of a 16-bit console from the 1990s; serious gamers played on PCs, but most top-tier games never released in India; and slow internet speeds meant multiplayer games were played on the local area network or LAN.

Cut to now and the gaming industry in India has experienced exponential growth, driven by technological advancements and increased internet penetration. Between FY20 and FY23, the online gaming sector—which includes mobile gaming—witnessed a CAGR of 28%, according to a report by professional services firm EY. Despite the highest GST slab being imposed on online gaming, the sector saw revenues hit $3.8 billion in FY24, a growth of 23% year-on-year, according to a report by VC firm Lumikai. The industry is set to experience more than 100% growth in the next five years, reaching $9.2 billion, the report says.

But it can do better. The sector is undergoing a challenging transition following the imposition of 28% GST on online gaming in October 2023. Despite that, India added 23 million new gamers in FY24, bringing the total number of gamers in the country to 590 million, second only to China, which has 750 million, says Lumikai. But India contributes less than 2% to the $200-billion-plus global gaming market—much lower than the U.S. and China, which contribute 25% each. Experts say this disparity underscores the high growth potential of India’s gaming industry.

Big players like South Korea-based Krafton Inc., the maker of the globally popular PUBG games and BGMI for India, see immense potential in India’s e-gaming market. “It has been phenomenal to build and grow the business in India for the past four years… India is one of the fastest-growing gaming markets across the globe. We want to tap into the opportunity,” says Sean (Hyunil) Sohn, CEO of Krafton India.