“Real Money Gaming sector to see 38% growth, become a $1.6 bn market by 2022”

The Madras High Court recently struck down the blanket ban imposed on rummy, poker, and all other games played online for a wager, bet, money or other stake, irrespective of it being a game of skill or a game of chance. This had come earlier as Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021. This is a significant judgement for the gaming industry.

Online Gaming has always seen a contentious debate between banning and regulating the online gaming space. The larger picture of the issue is, is online gaming bad, or do we need the right regulations for it? Many states such as Assam, Odisha, and Telangana have already banned online gaming in the state. Irregularities and inconsistencies can stifle the huge growth potential and employment opportunities in the sector, not to mention the impact on the Government’s ‘Make in India’ program.

Octro Inc is one of India’s largest and fastest-growing mobile gaming companies, with titles such as Teen Patti, Indian Rummy, and Tambola ranking in the Top 10 apps on Apple iOS, Google Play, and Windows Phone.

Founded in 2006, Octro has almost 200+ million users, with a projected user base of more than 628 million gamers in India. Octro is funded by The Sequoia Capital that invested $15 million in 2014. Having been actively involved in the Indian mobile gaming industry for both real money and social games for over a decade now, Octro aims at promoting Rummy, Teen Patti and Tambola as professional games and create a community of skilled gamers.

Adgully spoke to Manav Sethi, Chief Marketing Officer, Octro Inc, to know more about how regulation can be a catalyst for the gaming industry, impact of COVID-19, creating a Gaming ‘Metaverse’, and much more.

Could you give us an overview of regulation as a catalyst for the gaming industry in other countries, and also why it is needed in India?

The best way to answer this is by addressing the elephant in the room. Each state controls their outcome because of the legal right to form their own gambling laws. The current situation results in chaos and confusion as there is no one right regulation to consult in times of doubt. While Gaming and its impact do come under the framework and concurrent list of the Indian Constitution, the law that governs the Gaming industry is the Public Gambling Act of 1867, which is archaic.

Given the speed of advancement of technology and the ever-changing customer preferences, there is an urgent need to establish a regulatory framework for the Gaming industry. There is a dire need to harmonise laws at the Centre and of the various States, for starters. For any legislation, a process of public and stakeholder consultation usually is followed, but was not in the Gaming industry. We can get into the reasons for that in a separate discussion, but to bring sanity and uniformity to the entire, industry associations such as TORF (The Online Rummy Federation) have put in place checks and balances. To showcase high levels of transparency, the TORF and several prominent players in the Gaming industry are getting themselves audited by EY KPMG, PwC and Deloitte.

While the industry players and industries bodies are doing whatever they can to regulate the sector, there is no doubt that the industry will not live up to its potential unless the Government establishes guidelines. When regulations are drafted, it is also vital to consider every Gaming genre and not just one or a few genres. Also, most importantly, while the need for Regulations is soon reaching critical stages, care must be taken not to stifle growth to bring consistency.

What has been the effect of COVID-19’s second wave on the online gaming industry?

COVID-19, without question, brought countries across the world to a complete halt. Offices and schools shut down, retail activities were closed, and restaurants and hospitality came to a screeching stop due to government-mandated lockdowns in countries worldwide. People naturally then started looking for other avenues to keep themselves entertained and mentally active. A sector that saw growth sky-rocket to unprecedented levels was the Gaming industry, as existing players and new players used mobile and Internet games as an avenue to test and maintain their high levels of skill, creativity and decision-making.

Corporates also became conscious of this as employees took to gaming for entertainment, as a means of escaping from the rigours of work-from-home and staying connected with family and friends. In the absence of offline entertainment options that most people are accustomed to, online games such as Tambola, Teen Patti and Poker were an outlet to stay connected and engaged. According to a recent report from Deloitte, the total customer base of the Gaming industry in India crossed 300 million users, while the overall time spent on Gaming activities increased by 21%. According to the measurement of gross value, Teen Patti, Octro Inc’s most popular game, has broken through and is ranked amongst the top 5 online games. Repeated government-mandated lockdowns have brought new players from Tier 2 and Tier 3 cities, where mobile-based real-money gaming applications are witnessing revenue growth. Boost in online gaming has created several opportunities in data science, marketing, and creative communication leading to a flurry of direct and indirect jobs in the industry.

When it comes to creating a Gaming ‘Metaverse’, will video games surpass music and movies in popularity?

Constant innovation and technological advancement are factors that play a significant role in creating gaming ‘Metaverses’. With the gaming sector being one of the fastest-growing sectors, the industry has outgrown both the music and movie spaces by a long margin. Video game networks benefit from actual revenues from selling merchandise, game rights, hosting virtual events like the launch of films, concerts, or even sporting events. The medium to long term will probably see Gaming shifting to a more cloud-based or browser-based hosting ecosystem. Metaverse development is likely to multiply rapidly with the rise of the digital economy like payment wallets, cryptocurrency or NFTs. The unrelenting focus and investments in engineering, data science, customer relationship management are now beginning to show the rewards to those who invested in the same over the last few years.

When it comes to overtaking music and movies in terms of popularity, global figures show that the gaming industry has long since surpassed the amount of money that the music industry and box offices/ film industry make combined. Further proof of this is gaming developers investing substantial amounts of cash into world-famous music producers to develop soundtracks for their games. With billions of dollars pumped into the gaming industry, the video gaming industry has taken control of both collective markets and showed that what people want is a truly immersive experience that brings together the best of the music and film industry in a gaming environment.

The numbers by KPMG show that the Indian online gaming space has 7.3 billion installations and over 365 million users in 2020. Given the global pandemic, Gaming grew at a much faster rate than both movies and sports, given that most people had no choice but to stay indoors and find avenues of entertainment online.

How have the lines between gaming and entertainment blurred, particularly in light of the last two years?

Developers and gaming companies are going after the creation of a metaverse. Thus, any games created going forward will integrate high-end gaming and entertainment (music, film). However, the line between gaming and pure-play entertainment is not as straightforward as it once was.

Gaming has surged as an industry due to the inherent need to establish connections and a growing desire for virtual entertainment between family, friends, and peers. Digital consumption has increased to levels never seen before, leading to the demand for more diverse content. Mobile and online games have been the conduit for users to connect during these challenging times, and gaming is the catalyst that combines entertainment and gaming across geographies and various strata of life.

Entertainment and recreational options that require a physical presence or involve large gatherings came to a stop due to the onset of the pandemic. The possibilities that saw a fair bit of consumption from the safety of peoples’ homes saw the repetition of stale content as TV studios and OTT platforms had to use content from existing libraries. However, the gaming industry supported creating new content, and its consumption brought in new unique users in substantially large numbers. Popular online games like Tambola, Teen Patti, Poker, Rummy, Ludo saw their popularity and number of users reach record-breaking highs.

It was clear that the “new normal” had blurred the lines between gaming and what was once considered entertainment. A report by BARC & Nielsen showed how Indians went from 151 minutes of gaming a day to 218 minutes a day as soon as COVID-19 shut down the country over the last two years. With the trend not looking likely to change anytime soon, the lines between gaming and entertainment will get even more distorted and vague as Gaming functions fulfil the need for and is an essential source of entertainment during these challenging times.

Could you shed some light on the vast employment opportunities provided by the sector, as well as the potential for foreign investment in the sector, which is awaiting regulations?

A recent report from IMARC Group, titled ‘Gaming Market: Global Industry Trends, Share, Size, Growth, Opportunity, and Forecast 2020-2025’, expects the Global Gaming market to grow to a value of $204.6 billion by 2020-2025, with the Indian Gaming industry expected to clock a growth of $14 billion by 2025. With the largest youth population globally, India will soon become one of the world’s leading markets for gaming. The Gaming industry is currently going through a ‘Boom’ period, resulting in Game developers and platforms ramping up their hiring efforts. When the sector goes through a period of rapid growth, it undergoes a cyclical effect beginning with investors (both domestic and foreign) who want to invest in the space, leading to a flurry of employment opportunities across the board. These opportunities could range from Designers, Developers, Animators, Sound and Audio Engineers, Gaming Critics and Testers, to name a few. India has a long line of skilled talent with the technical and creative prowess to meet international game development needs while still being extremely low-cost. Still, the command of English for most of the talent gives India a definite advantage when hiring best-of-breed talent.

The recent landmark ruling by the Madras High Court judgment on Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021 will prove to be a massive shot in the arm for an industry that is already brimming with potential. The Indian gaming industry sector during the August 2020-January 2021 period has attracted $544 million in investments. It is on track to double over the next 12-18 months due to a further anticipated growth in the immediate future. A notable point of interest is the news about cross border M&A’s that are making news along with several Indian gaming developers ready to become Unicorns over the next few years. The Gaming industry in India, while still in a very nascent stage, is overflowing with potential. In the short-to-medium terms, this will result in investments in the sector rising significantly due to a young target audience, increasing mobile penetration of Internet telephony and smartphones on the back of constantly falling tariffs. A report from PGA Labs has suggested that the Real Money Gaming (RMG) sector, which is 68% of the online gaming industry today, is expected to see a CAGR of 38% and by 2022 become a $1.6 billion market. Providing a massive fillip to the domestic Gaming industry, the industry will soon see global Gaming giants knocking on the doors and wanting to be a part of the Indian Gaming industry. Of course, none of this will happen without the Government of India recognising the potential and possibilities of the Gaming industry and establishing guidelines and a regulatory framework on a war footing.


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