25 May 2024 – The Indian Express

India’s Booming Gaming Sector

• India’s thriving online gaming market is expanding quickly because to the country’s tech-savvy populace and growing digital economy. India’s gaming industry is positioned to make a lasting impression on the global gaming scene thanks to the country’s growing youth population, high-speed internet availability, and widespread smartphone use.
• With 568 million users and more than 9.5 billion gaming app downloads by 2023, India is now the largest gaming market in the world. The Indian industry has grown at an astounding 28% Compound Annual Growth Rate (CAGR) between FY20 and FY23, demonstrating the sector’s remarkable growth trajectory. Significant local and foreign investments are being drawn in by this amazing growth, which is also creating a large number of direct and indirect job possibilities.

What are the driving forces behind India’s gaming industry’s growth?

• Better Internet Infrastructure and Connectivity: Online gaming is now available outside of major cities thanks to the growth of broadband connectivity in Tier-II and Tier-III cities.
• The National Broadband Mission and BharatNet are two initiatives that have attempted to bring high-speed internet connection to remote and rural areas.
• The widespread adoption of 4G and the upcoming 5G networks has improved internet speeds and decreased latency, which are necessary for uninterrupted online gaming.
• Affordably available Data and Smartphones: Due to fierce competition among telecom providers, the costs of mobile data plans have decreased, making data more available and reasonably priced for online gaming.
• The spread of internet gaming among all socioeconomic groups has been significantly fueled by this democratisation of technology.
• Approximately 680 million cellphones are currently in use in India, and more than 80% of them are 4G models, according to Counterpoint Research.
• In India, mobile phones account for 90% of the gaming market, but in the US and China, the equivalent shares are roughly 37% and 62%.
• Cultural Shift and Changing Perceptions: Online gaming became more popular as a means of social interaction and virtual enjoyment during the Covid-19 shutdown period.
• A June 2021 KPMG research states that within a month of the lockdown, Indians’ average weekly time spent playing online games climbed from 2.1 hours (11% of total smartphone time) prior to the lockdown to 4.5 hours (15% of total smartphone time).
• Because of this, people’s perceptions of online gaming gradually changed from being seen as a simple hobby to being seen as a potential professional path.
• Government Support and legal Clarity: To address concerns about hazardous material and addiction, initiatives like the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 have established a legal framework for online gambling.
• The goal of the Animation, Visual Effects, Gaming, and Comics (AVGC) Promotion Task Force and the creation of self-regulatory bodies has been to encourage the expansion and advancement of the industry.
• Securing capital from international investors has become easier as a result of the government’s decision to permit 100% Foreign Direct Investment (FDI) in the gaming industry.
• Not to mention, the government’s recent announcement that gamers would get the Content Creators Award 2024 is a big step towards improving the gaming industry generally.
• The emergence of e-sports and competitive gaming can be attributed to its inclusion as a medal event in major events such as the Asian Games 2023 and the Commonwealth Games 2022, which have enhanced e-sports’ status and recognition as a valid sport.
• Aspiring gamers have been encouraged and the industry’s prominence has been further raised by the success of Indian teams and players on international esports platforms.
• Just 1.1% of worldwide online gaming revenue is currently generated by the Indian online gambling market.
• Integration of Cutting-Edge Technologies: Blockchain, cloud gaming, augmented reality (AR), virtual reality (VR), and other technologies have improved gaming and created new opportunities for innovation.
• While cloud gaming makes gaming accessible across devices by doing away with the requirement for expensive hardware, AR and VR provide immersive and interactive gameplay mechanisms.
• Increased involvement is fostered by blockchain integration, which makes it possible to own digital assets, create tokenized economies, and facilitate interoperability between games and platforms.
• A thriving environment for start-ups and a surge in investment has been witnessed in India, where a multitude of gaming companies and platforms have emerged to meet the varied gaming interests of Indian consumers and foster innovation.
• Dream11, Mobile Premier League, and Game 24X7 are the three gaming unicorns that India has developed.

What Are the Main Obstacles for India’s Gaming Industry?

• Regulatory Ambiguity and Fragmented Policies: The absence of a unified and all-encompassing regulatory framework in India has left stakeholders in the gaming business uneasy and ambiguous.
• The legal framework around internet gaming varies throughout states, creating a fragmented policy environment.
• For instance, whereas certain online gaming categories are prohibited in Telangana and Andhra Pradesh, other states, like Karnataka, have taken a more lenient stance.
• Tax Issues and Sustainability Challenges: The recent implementation of a 28% Goods and Services Tax (GST) on the total face value of wagers has sparked questions over the industry’s long-term viability, especially for smaller firms and participants.
• Opponents contend that this high tax rate will discourage innovation and stunt the expansion of the gaming industry by driving out a large number of smaller operators.
• Infrastructure and Connectivity Challenges: Despite notable advancements, many regions of the nation still struggle with dependable, fast internet connectivity, especially in rural and isolated places.
• Compared to 67% of people in cities, just 31% of people in rural areas utilise the Internet (India Inequality Report 2022).
• material Localization and Cultural Relevance: It might be difficult for game creators to create games and material that speak to the many cultural and language contexts in India.
• For instance, many worldwide games fail to achieve the same level of cultural resonance among Indian audiences, yet some games, like Ludo King, have been effectively adapted to local tastes.
• Concerns about Responsible Gaming and Addiction: As the gaming business expands, there are justifiable worries about the possible dangers of addiction, especially for younger people.
• Among school-age, undergraduate, and graduate students in India, the frequency of internet gaming disorder varied from 1.3% to 19.9% for the teenage group.
• Signs warning people to “Beware of Smartphone Zombies” have recently been installed in Bengaluru, serving as a sobering reminder of the increasing problem of digital distraction.

 What Steps Can Be Taken to Improve India’s Gaming Sector?

• Regulatory Clarity: Improving regulatory clarity is essential for the gaming industry, particularly with relation to the successful establishment of self-regulatory organisations that are required by the IT Rules of 2021.
• This is urgently needed because it is still pending and will undermine the desired impact.
• Installing specialised gaming hubs and incubators in large cities can promote creativity, teamwork, and the development of talent.
• These hubs can offer game creators, companies, and aspiring professionals tools, mentorship, and cutting-edge infrastructure.
• Encourage and provide incentives for game developers to produce games that draw inspiration from India’s rich cultural legacy, mythology, and folklore.
• This can assist in giving Indian games a distinctive personality that appeals to both home and foreign players.
• Example: “Raji: An Ancient Epic” is one game that effectively combines fun gameplay with aspects of Indian culture.
• Creative Funding and Investment Models: To encourage game creation and businesses, promote alternative funding models such as crowdsourcing, venture capital investments, and public-private collaborations.
• For instance, international game developers such as Ubisoft have dabbled in in-game economies and blockchain-based assets.
• Women: The Pioneers of India’s Gaming Revolution: As a substantial 40% of the country’s gamers, women are in a prime position to spearhead the gaming revolution in their homeland.
• India can tap into a plethora of talent, a variety of viewpoints, and creative ideas that can propel the gaming industry’s expansion and success by promoting and supporting women in the field.
• Encourage Cross-Industry Collaborations: To investigate the possibilities of gamification and serious games, encourage cooperation between the gaming industry and other industries such as tourism, education, and hospitality.
• These cross-sector partnerships may result in creative uses of gaming technology across a range of fields.