India is spending more on mobile, PC and console games than a year ago, according to a March 21 report by EY and FICCI, which claims that the number of paying gamers in India increased by 17% from 80 million in 2020 to 95 million in 2021.
The total number of online gamers grew 8% from 360 million in 2020 to 390 million in 2021. EY is expecting the number of gamers to cross 450 million by 2023.
The increase in spending has led to double-digit growth for the gaming industry in 2021. According to the report, the online gaming segment in India grew 28% in terms of annual revenue from ₹79 billion in 2020 to ₹101 billion in 2021. EY predicts the revenue to grow to ₹119 billion in 2022.
Revenue for transaction-based games grew by 26%, due to growing interest in fantasy sports and real money games on rummy. Similarly, revenue for esports and casual gaming grew 32% due to increased in-app purchases, the report said.
The increase in spending on online gaming can be attributed to average users spending more than they used to earlier as well as the growing volume of new gamers in India, according to Ashish Pherwani, partner and media & entertainment leader at EY India.
Pherwani pointed out, as per our industry interviews, the factors that contributed to it include lifting of the ban on gaming in several states and remote learning leading to the addition of new users; increase in the spending capacity of mid and serious gamers, and the emergence of new gamers in tier 3 cities.
Ban on transaction base games in several states including Karnataka, Tamil Nadu, and Kerala was lifted in 2021 after some of the gaming companies moved the high courts in the respective states over the ban.
The report shows that in-app purchases grew 40% from ₹5.5 billion in 2020 to ₹7.7 billion in 2021, despite the ban on PUBG Mobile, which was one of the highest-grossing games in India. It is still the highest grossing game globally as per Sensor Tower.
Revenue from esports also grew from ₹7.5 billion in 2020 to ₹9.7 billion in 2021, while advertisement revenue soared from ₹7 billion in 2020 to ₹8.4 billion in 2021, the report said.
Gaming emerged as one of the favourite pastimes as well as a coping mechanism for many Indians during peak pandemic months. Despite the return to work and schools, interest in gaming has remained strong as is evident with the increase in spending.