India's gaming industry is on a rapid rise towards a projected value of USD 9.2 billion by 2028-29, as per Lumikai's report. Notable growth in in-app purchases and advertising revenue are key factors driving this expansion. Despite challenges like tax issues affecting real money gaming, the sector sees promising trends with a 23% growth in FY24, 41% growth in in-app purchases, and a growing gamer base reaching 590 million users, making India the world's second-largest mobile gaming market.
India's gaming industry is on an upward trajectory, poised to reach new heights of success by 2028-29, with a projected market value of USD 9.2 billion. Lumikai, a leading venture capital firm, highlighted this optimistic forecast in their recent 'State of India Interactive Media and Gaming Report'. The report unveiled a remarkable 23% growth in the Indian gaming market during the financial year 2024, surging from USD 3.1 billion to USD 3.8 billion.
One of the key drivers behind this phenomenal growth is the surge in in-app purchases and advertising revenue. The report indicates that the gaming market is expected to expand exponentially, reaching the impressive USD 9.2 billion mark by the end of the fiscal year 2029, showcasing a robust 20% compound annual growth rate over the next five years.
Notably, in-app purchase revenue emerges as the fastest-growing segment, boasting a remarkable 41% year-on-year growth rate. Real money gaming platforms, buoyed by absorbing users' GST expenses and a bustling live sports season featuring two world cups and the IPL, contributed an estimated USD 400 million to their revenue streams.
Despite the remarkable revenue growth, challenges in taxation for real money gaming platforms have led to margin compression and profitability concerns, as outlined in the report. However, casual and hypercasual games have seen a consistent 10% annual growth in in-app purchase revenue, while advertising revenue has remained steady, even amidst global cutbacks in ad spending.
The Indian gaming landscape has witnessed a significant influx of 23 million new gamers, reaching a total of 590 million gamers in FY24. India now holds the title of the world's second-largest market in terms of mobile gaming downloads, surpassing the US and Brazil by 3.5 times, according to the report.
Moreover, the report sheds light on the fact that the average time spent weekly on gaming has surged by 30%, from 10 hours to 13 hours. Additionally, the annual average revenue per paying user (ARPPU) has increased by 15% to USD 22 in FY24 compared to FY23.
With a notable 25% of users engaging in in-game payments, the number of paying gamers has reached 148 million. Interestingly, over 60% of real money gaming paying users are also investing in mid-core games, indicating a significant overlap in gamer preferences and a growing level of sophistication among gamers, as highlighted in the report.
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