India’s gaming market is set to become $7B in FY 2026: RedSeer and Lumikai

India’s gaming market is set to become $7 billion in FY2026 (more than 3X of the market in FY2021) while in-app purchases are the fastest growing revenue streams of the market with an increasing number of paid users and their growing propensity to pay is driving the growth, according to a comprehensive report by Lumikai and Redseer titled “India Gaming Report 2021".

"Paid gamers in India are set to become ~235 million in 2025, from 80 million gamers in 2020 which will drive the growth of paid gamers," the report states.

Some of the interesting trends the report highlights -

1. While real-money games are the largest source of revenue for the market, IAPs will grow faster for the next 5 years at 30-40 percent with the rise of paying users in casual & hyper-casual gaming.
2. Further, Non-RMG gaming segments are expected to grow faster than the market growth rate, with eSports and Streaming expected to grow at 40-45 percent CAGR for the next 5 years. 
3. An average gamer spends $16-a-year on gaming, and it takes ~1 week to start paying to play games

Apart from the increasing maturity of gamers and their propensity to pay, gamers are embracing the trend of playing “India-first content” games, the report suggest. 

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Mukesh Kumar, Engagement Manager at RedSeer Consulting stated,

“This is an exciting time for the gaming ecosystem in India. Access to gaming is democratized with increasing participation from Tier-II cities and beyond, gamers are maturing in the way they play different gaming genres, and unprecedented growth in new-paying users (NPU) to drive the overall gaming market to become 3X in the next 5 years.

"While real-money gaming (RMG) will continue to dominate the market, in-app purchases (IAP), virtual gifting, etc to become mainstream spend categories among paid gamers, and the revenue from IAP is expected to outgrow overall India’s gaming market growth rate."

“This inaugural report represents the most in-depth analysis of India's gaming market ever undertaken, and the goal was to face the core assumptions on the true potential of the market. What has emerged is a picture of the market that already exceeds preconceived notions around size, growth, sophistication, and most importantly propensity to pay.

India’s gaming market is due to 3X in value to over $7B by 2025, driven by a healthy diversity of monetization mechanics that indicate plenty of white spaces for new investment, and massive potential for a new generation of leaders across the gaming value chain. We’re excited to continue being at the forefront of India’s gaming investment landscape as the market matures and evolves to the next level.” added Justin Keeling, General Partner at Lumikai Fund.