India to become a $7.5B gaming market by 2028: Report
Lumikai anticipates the sector to grow at a CAGR of 20%, driven by an increase in in-app purchases and advertising revenues in casual and mid-core games.
India is likely to emerge as a key market—no longer remaining an emerging market—for games with the sector predicted to touch a value of $7.8 billion by 2028, as per a recent report.
In the third edition of its State of India Gaming report, gaming, and interactive media fund attributes this growth to an affinity towards byte-sized entertainment and participation in interactive communities, besides the ability to have faster downloads, rapid smartphone penetration in the country, and the availability of affordable data.
"With 15.4 billion downloads, India is among the top countries in the world for total mobile game downloads," it said. Lumikai also anticipates the sector to grow at a CAGR of 20%, driven by an increase in in-app purchases and advertising revenues in casual and mid-core games.
Despite the recent ban of marquee battle royale titles like KRAFTON's Battle Grounds Mobile India (BGMI) and Garena's Free Fire in FY23, in-app purchases remained stable. Overall, estimated in-app purchases were $323 million in this year, up from the $236 million recorded last year for games other than BGMI and Free Fire.
Players were also cautiously optimistic about BGMI's return in May this year, YourStory previously reported.
As for the real-money gaming (RMG) segment, revenue for the sector grew by $500 million in FY23 but is expected to face headwinds in the coming years due to recent policies and industry consolidation, the report said.
A survey conducted by Lumikai across a sample of 2,317 respondents found that 60% of users said that the latest GST regulations around gaming and TDS rules would negatively impact how much they engaged with such games.
On funding, the report found that direct investments by strategics such as Mixi, Sony, and Krafton point towards a positive outlook for the sector.
"Even though funding has slowed down this year, the outlook towards the gaming industry is extremely positive. We're particularly excited to see the increasing engagement of gamers from non-metro cities, which demonstrates the massive growth potential and the opportunity in the Indian gaming industry," said Salone Sehgal, Founding General Partner, Lumikai, in a statement.
In June this year, Lumikai launched its second fund (Fund II) targeting a $50 million corpus from global investors.
Edited by Saheli Sen Gupta
