Indian online casual gaming to grow at a CAGR of 29% over FY21-25 to reach Rs 169 billion: KPMG

The report reveals that the dependence on advertising as a means of monetisation remains unique to India and is not likely to go away.

India recorded the highest game downloads in the casual mobile gaming sub-segment in the world (excluding China) in 2020, with Q1-Q3 2020 downloads standing at 7.3 billion, accounting for 17% of the global mobile game downloads, according to a report by KPMG. Further, the monthly active users for the top 100 mobile games and the time spent on online gaming, increased 10-15% post lockdown 2020.

“Our report aims to simplify the multilayered ecosystem of the world’s second largest online casual gaming user geography. Poised at a 3X growth in revenues between FY21-25, we have been privy to the keen interest from corporates and investors who want to ride the incredible wave of opportunity that the business of online casual gaming has to offer,” Satya Easwaran – partner and head, technology, media and telecom, KPMG India, stated.

Titled, ‘Beyond the tipping point – A primer on Casual gaming in India’, the report highlighted how overall online casual gaming sub-segment in India stood at a size of Rs 60 billion in FY21 and is projected to grow at a CAGR of 29% over FY21-25 to reach a size of Rs 169 billion. The casual gaming sub-segment accounts for 44% of the total online gaming revenue. Meanwhile, in terms of users, the casual gaming sub-segment accounted for 97% of the total gamers in India at 420 million.

As for advertising revenue on the gaming platforms, the report reveals that the dependence on advertising as a means of monetisation remains unique to India and is not likely to go away in the near to medium term as free to play games dominate consumption in India. However, developers and publishers are increasingly relying on tools such as rewarded/incentivised ads, to strike an optimum balance between monetisation and retention, and not hampering the overall user experience. With an increasing share of time spent on gaming, advertisers/brands are looking at online casual gaming as a viable means to reach their intended target audiences. This is especially important as online casual gaming reaches the masses, across demographics.

According to the report, cloud gaming has the potential to transform the gaming experience for a mass of users, taking device capabilities out of the picture keeping in mind the proposed launch of 5G services. This is especially important for markets like India, with limited capacity to invest in hardware. Further, over the next five years, the esports segment is expected to grow rapidly due to increased interest from brands for sponsorship, publishers to promote games and entry of new players across the value chain ranging from organisers to participating teams. The India esports sub-segment is expected to grow by CAGR 27% over FY21-25 to reach a size of Rs 5.7 billion.

For Girish Menon, partner and head, media and entertainment, KPMG India, with technologies such as cloud gaming on the anvil and the adoption of latest AI/ML led technologies, online casual gaming in India is serious business, both for the players in the ecosystem as well as the investors. “We envisage the online gaming segment to be amongst the largest segments of the M&E industry in India in the years to come, garnering a share of both the time, and the wallet of the Indian digital billion,” he added.

Follow us on Twitter, Instagram, LinkedIn, Facebook