Meteoric rise of Indian Video Gaming & Esports sector in 2023

The year 2023 has been a monumental one for Indian Esports, marked by significant achievements and a thriving ecosystem including:

1. Esports taking center stage at Asian Games 2022: With Esports debuting as an official medal sport at the Asian Games 2022, India's 15-member contingent showcased its prowess in four different titles at the prestigious tournament where its League of Legends contingent secured a historic fifth-place finish.

2. Government Recognition and Regulatory Clarity: The Indian government's amendments to the Information and Technology (IT) Act recognized Esports as distinct from real money gaming, ensuring legitimacy for the sector. This mainstream recognition has led to the country's Esports sector witnessing a surge in sponsorships and investments, attracting support from both endemic and non-endemic brands.

3. Birth of Esports-centric Societies and Educational Courses: Five students from Delhi University’s Hansraj College, along with two students from a Ghaziabad-based engineering college came together to form Delhi University's first-of-its-kind Esports society called 'ARCADE.' Moreover, educational institutes around the country such as the Dalimss Sunbeam School Varanasi, Indian School of Gaming, and Whistling Woods International School have already recognized the growing potential of Esports as an official sport and have adopted Esports in their curriculum to contribute to its growth.

4. Return of BGMI and Free Fire sparking an increase in entry of Celebrities and Brands in Esports: The long-awaited return of Battlegrounds Mobile India (BGMI) and Free Fire culminated in prominent figures like Ranveer Singh, Hardik Pandya, MS Dhoni and Sunil Chhetri joining Esports as ambassadors for games like BGMI and Free Fire, elevating its status and exposing massive fan bases to the gaming world. Additionally, official BGMI tournaments were broadcast on well-renowned platforms like JioCinema and Star Sports, signifying Esports' mainstream acceptance.

5. Esports World Cup 2024: The announcement of the Esports World Cup 2024 in Saudi Arabia has further promised a world of opportunities for Indian Esports, promising global recognition and attracting investment from sponsors, legacy brands, and venture capitalists.

In regards to Esports data specific to India, please find below the findings of the recently published "Leveling up: State of India Gaming FY’23" report by Lumikai in collaboration with Google on the esports segment:

• The Indian gaming industry clocked $3.1 Bn in FY23 and is set to hit $7.5 Bn by FY28. The report anticipates that the industry will grow at a CAGR of 20%, driven primarily by growth in in-app purchases in casual and mid-core games and growing in-game advertising revenues.
• India is home to 568 million gamers, of which 25% are paying users. The growth in paying users has seen an increase of 17% YoY.
• With 15.4 billion downloads in FY23, India retained its position as one of the top countries globally for mobile game downloads.
• The average time spent on gaming increased by 20% YoY, to 10-12 hours per gamer per week.
• While India saw the suspension of BGMI and Free Fire in FY23, in-app revenue outside of these two games witnessed a 37% year-on-year surge. ARPPU reached $19.2 in FY23, growing nearly 10x since FY19. This was on account of steadily increasing monetization across other casual and mid-core games, indicating a growing propensity by Indian gamers to explore new IPs.
• Rapidly improving digital infrastructure and India’s evolving position as a game development hub bode well for the industry. Funding has slowed down, mirroring global activity; but direct investment by strategics such as Mixi's New $50 Mn CVC fund, Sony's India Hero Project incubator program to support emerging studios, and Krafton's Target investment of $150 Mn in funding; separate incubator with investment ranging $50K-$150K per team point towards a positive outlook.
• Pan-India survey of >2000 users provides insights including 50% of gamers in the country fall within the age bracket of 18-30 years, with a male-to-female ratio of roughly 60:40, with an increase in the number of gamers in non-metro regions. Most users stated that they play games to unwind or socialize with friends and that they stop playing a game once they’ve accomplished objectives or if they see too many ads.
• Government policies have made a clear distinction between games with cash-based outcomes and games with non-cash-based outcomes. The AVGC task force recommendations and the recognition of esports as an official sport have lent credibility to the overall gaming industry.

Niko Partners' "India Games Market 2023" report projects India video games revenue across all platforms to reach $868 million in 2023, up 21.2% YoY. India’s video game market is the fastest growing by gamers and revenue, which is forecast to reach $1.6 billion by 2027, growing at a 5-year CAGR of 17.2%. The report excludes revenue generated from Real Money Games.

The number of gamers in India across all platforms is forecast to reach 444 million in 2023, up 12.1% YoY, and reach 641.2 million in 2027, growing at a 5-year CAGR of 10.1% says the report.