442 million online gamers in India, second-largest base globally: Report

India has the world’s second-largest online gaming community; just after China, a new report has said, adding that even after the 28% goods and services tax (GST), investor sentiment for the real money gaming segment has remained robust as reflected by deal activity.

“The number of online gamers in India soared to an impressive 442 million, establishing it as the second-largest gaming user base globally, surpassed only by China,” said a report by Grant Thornton Bharat and the E-Gaming Federation (EGF).

According to the report titled ‘Guardians of Safe Play: Ethical Gaming for Vibrant Bharat’, the industry is projected to experience a 20% growth by FY25, reaching Rs 253 billion. “Over the last five years, Indian gaming has raised USD 2.8 billion from domestic and global investors,” it said.

It also noted that the real money game (RMG) segment is emerging as one of the chief revenue drivers within the industry. “With users spending an average of 8.5 hours per week in FY22, this segment is gaining significant traction,” it said.

Noting that the RMG sector faced several challenges in 2023, the report which was released on Tuesday, said that the 28% GST significantly impacted the sector, leading to widespread lay-offs and the closure of some start-ups due to the tax burden.

“Despite these challenges, the sector continues to account for 83-84% of the revenue, with approximately 100 million online gamers daily, including 90 million paying to play,” the report said, adding that this gamer participation ensures the industry’s expansion continues, with the tax implications having a limited impact on overall long term growth.

However, investor sentiment remains strong in the industry, with deal activity reflecting confidence in its sustained growth, the report said, highlighting notable examples of investments made in FY23 such as the acquisition of Ante Multimedia’s Good Game Exchange by Galactus Funware Technology - Mobile Premier League for $12.75 million.

In this backdrop, it has highlighted the need to prioritise adherence to a strong code of conduct and embrace self-regulation to ensure sustainable growth of this industry. The report advocates for a comprehensive Code of Conduct (CoC) in the gaming industry, setting clear standards for ethical behaviour to ensure accountability and transparency. It also underscores the importance of third-party certification for fostering self-regulation and maintaining high industry standards.