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Study shows potential of online gaming sector, despite high tax rate

The study, titled "Unveiling the Potential and Scope of the Online Skill Gaming Industry", comes at a time when the sector is facing taxation similar to sin goods at 28%, which has called into question the survival of many entities, mainly the smaller ones.

Study shows potential of online gaming sector, despite high tax rate

Wednesday September 06, 2023 , 2 min Read

A study by the E-Gaming Federation in consultancy with the Indian Statistical Institute (ISI) has found that, despite a high tax rate, the players are optimistic about the potential of the online skill gaming industry in India.

Skill gaming is a game in which the outcome is impacted by the player's skill and not chance or luck.

The study, titled "Unveiling the Potential and Scope of the Online Skill Gaming Industry", comes at a time when the sector is facing taxation similar to sin goods at 28%, which has called into question the survival of many entities, mainly the smaller ones.

The survey, advised by two ISI professors, Diganta Mukherjee and Subhamoy Maitra, surveyed 4,644 engineering students and professionals across five states—Andhra Pradesh, Telangana, Kerala, Karnataka, and Tamil Nadu—to explore their perceptions, aspirations, and preferences regarding the online skill gaming sector.

The study found that the majority of respondents are optimistic about India's potential to lead the global gaming industry, interested in pursuing professional education and careers in the online skill gaming sector, and aware of the importance of new technologies like AI or ML (artificial intelligence or machine learning) and VR (virtual reality) in the gaming domain.

The study also revealed that the online skill gaming sector is attractive for highly skilled engineers, as it offers opportunities for innovation, skill development, and gamification.

"Projections indicate a staggering growth trajectory, with India's gaming market expected to soar from $2.8 billion in 2022 to $5 billion by 2025, growing at a compounded annual growth rate (CAGR) of 28-30%.

"The gaming industry's meteoric rise between 2017 and 2020, is currently expanding at a CAGR of 38%," the study said.

It suggested that the online skill gaming sector needs a conducive ecosystem that fosters innovation, invests in skill development, and promotes policies encouraging entrepreneurship and domestic investment.

The study also urged the government and the industry to work together to ensure the safety and benefits of online skill gaming.

(This was updated to correct a factual error.)


Edited by Suman Singh