Online gaming revenue in India set to reach Rs 29,000 crore by '25: KPMG report

Online gaming has boomed in India in the last few years and has become a financial beast that many had not predicted. And as the pandemic took over the nation, people resorted to gaming more and more which resulted in a boom for the industry.

A new KPMG India report titled 'Beyond the tipping point – A primer on Casual gaming in India' is out which has thrown up some fascinating new stats. And of primary interest is that the report claims that revenues from the online gaming sector in India is set to touch Rs 29,000 crores by the financial year 2025. It is set to have a total player base of 65.7 crore in the year 2025.

Besides this the report also claims that rewarded ads will be the way forward and more people already prefer that over in-game purchases. Girish Menon, Partner and Head, Media and Entertainment, KPMG in India said, “Rewarded ads will drive the growth of ad revenues in the casual gaming sector as we move forward. It provides a win-win situation. They have tremendous potential in India where people prefer watching free content with ads. This will change the narrative around advertising.”

Rewarded ads has players watch a non-skippable ad in exchange for an incentive in-game. This is seconded by a recent global survey by Unity Ads, which says that 54% players specifically chose rewarded ads over paying for upfront and in-app purchases (IAPs) which accounts for 18% and 11%, respectively.

The report further states that the casual gaming segment with a revenue of Rs 16,900 crore will soon dwarf real money games (RMGs) (Rs 6130 crore) and online fantasy sports (OFS) (Rs 5430 crore). But we must point out here that while the real money games and online fantasy sports companies might project themselves as games these are strictly gambling apps.

For financial year of 2021 casual gaming in India has an approximate size of Rs 6000 crore, this includes Rs 3620 crore of ads, which means consumer spending was Rs 2410 crore. This split is set to grow to Rs Rs 9890 crore and Rs 6970 crore respectively in 2025.

The report claims that India has the second-largest base of online gamers in the world. Only China has more number of online gamers, and India achieved this with robust technological development that includes high-speed internet affordable 4G data prices, and fast growing digital payments system. Having close to 50 crore smartphones is also a big boost for this number.

The launch of the 5G services is set to be a big boost to the cloud gaming services, and esports is set to grow as well with increased interest from brands, publishers and developers in this huge market. The esports sub-segement in India is set to grow by CAGR 27% over a period of financial year 2021-25 and will reach the since of Rs 5,700 crores.