India’s gaming market set to become $7 bn in FY2026: RedSeer & Lumikai
Lumikai and Redseer have come up with a comprehensive report on the gaming space in India in their recent report, titled ‘India Gaming Report 2021 by Lumikai and Redseer’.
According to the report, India’s gaming market is set to become $7 billion in FY2026 (more than 3x of the market in FY2021), while in-app purchases are the fastest growing revenue streams of the market with an increasing number of paid users and their growing propensity to pay is driving the growth.
India currently has ~425 million gamers, who play across 3 broad gaming channels – PC & Console games, Mobile-based games and E-sports & streaming – and various game segments and genres. India emerged as one of the fastest growing gaming markets in the world, with growth in new paying users (NPUs) now at over 50%.
Paid gamers in India are set to become ~235 million in 2025, from 80 million gamers in 2020, which will drive the growth of paid gamers. ~20% of the gamers pay for games and the propensity to pay is growing as games are becoming more popular and engaging. In-app purchases and Real Money Games form the majority of spends amongst gamers. An average gamer spends $16 a year on gaming, and it takes ~1 week to start paying to play games.
While real-money games are the largest source of revenue for the market, IAPs will grow faster for the next 5 years at 30-40% with the rise of paying users in casual and hyper-casual gaming.
Further, Non-RMG gaming segments are expected to grow faster than the market growth rate, with eSports and Streaming expected to grow at 40-45% CAGR for the next 5 years.
Increasing maturity of gamers and growing propensity to pay will be the key drivers for growth of paid gamers.
Apart from the increasing maturity of gamers and their propensity to pay, gamers are embracing the trend of playing “India-first content” games. 60%+ gamers are willing to play games with an Indian central theme or characters like from mythology or celebrities, etc.
“This is an exciting time for the gaming ecosystem in India. Access to gaming is democratised with increasing participation from Tier 2 cities and beyond, gamers are maturing in the way they play different gaming genres, and unprecedented growth in new-paying users (NPU) to drive the overall gaming market to become 3-times in the next 5 years. While real-money gaming (RMG) will continue to dominate the market, in-app purchases (IAP), virtual gifting, etc., will become mainstream spend categories among paid gamers, and the revenue from IAP is expected to outgrow overall India’s gaming market growth rate,” said Mukesh Kumar, Engagement Manager at RedSeer.
“This inaugural report represents the most in-depth analysis of India’s gaming market ever undertaken, and the goal was to face the core assumptions on the true potential of the market. What has emerged is a picture of the market that already exceeds preconceived notions around size, growth, sophistication, and most importantly propensity to pay. India’s gaming market is due to 3x in value to over $7B by 2025, driven by a healthy diversity of monetization mechanics that indicate plenty of white spaces for new investment, and massive potential for a new generation of leaders across the gaming value chain. We’re excited to continue being at the forefront of India’s gaming investment landscape as the market matures and evolves to the next level,” said Justin Keeling, General Partner at Lumikai Fund.