India’s Gaming Market Expected to Reach $7.5B by 2028
- ByStartupStory | November 2, 2023
According to a recent report by Lumikai, India is poised to become a significant gaming market, with a projected value of $7.8 billion by 2028. This growth is attributed to various factors, including a preference for quick, byte-sized entertainment, active participation in interactive gaming communities, improved download speeds, widespread smartphone adoption, and the availability of affordable data. India is currently one of the world’s top countries in terms of total mobile game downloads, with 15.4 billion downloads.
Lumikai expects the gaming sector to maintain a robust Compound Annual Growth Rate (CAGR) of 20%, primarily driven by increased in-app purchases and advertising revenue in casual and mid-core games. Despite the ban on popular battle royale titles like KRAFTON’s Battle Grounds Mobile India (BGMI) and Garena’s Free Fire in the fiscal year 2023, in-app purchases have remained steady. In fact, estimated in-app purchases reached $323 million this year, compared to $236 million the previous year, excluding BGMI and Free Fire. There is also cautious optimism about the potential return of BGMI in May.
However, the report also notes that the real-money gaming (RMG) segment, despite a $500 million revenue increase in fiscal year 2023, may face challenges in the near future due to recent policy changes and industry consolidation. A survey conducted by Lumikai revealed that 60% of respondents expressed concerns that the latest GST regulations and TDS rules could negatively affect their engagement with gaming.
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On the investment front, Lumikai found that direct investments from strategic players such as Mixi, Sony, and Krafton indicate a positive outlook for the gaming industry. Despite a slowdown in funding this year, the gaming sector in India is seen as highly promising. Lumikai, in particular, is enthusiastic about the growing engagement of gamers from non-metro cities, demonstrating the substantial growth potential in the Indian gaming industry. In June, Lumikai launched its second fund (Fund II) with the goal of raising a $50 million corpus from global investors.
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