Gaming is serious business these days. Once a niche market, digital gaming has today become mainstream entertainment, thanks largely to the availability of smart devices. According to e-sports analytics company Newzoo, the global digital games market will likely reach $134.9 billion in 2018, a growth of 10.9 per cent over 2017.
The world’s top gaming countries are China, the US, Japan and South Korea. In China and South Korea, physical spaces are being turned into gaming zones. In fact, in South Korea, it has become a national pastime. The possibility of including esports in the Olympics is also being considered.
The most dominant gaming segment is mobile gaming, which is expected to account for 47 per cent of the market in 2018. This has been driven largely by smartphones, which have been defining and setting trends in various domains. A smartphone has become a television, a book, a telescope, a camera and now also, a gaming console, replacing joysticks and joypads. The development of mobile app-based games has phenomenally increased the number of gamers globally. Mobile games today range from simple card games (Hearthstone and Sage Solitaire) and puzzles for casual/amateur gamers to the most complex strategy and role-playing games (League of Legends and Call of Duty); some even have huge stakes involved. Notably, while the movie-going population has hit a low in countries like the US, the number of game downloads has increased as people are now seeking entertainment on their phones.
Gaming scene in India: What works and what doesn’t
The Indian mobile gaming market is projected to become a $1 billion industry with around 368 million mobile gamers by 2022, according to a recent report, “Understanding Mobile Gaming in India 2018”, by the Mobile Marketing Association and Kantar IMRB in association with POKKT. Much of this is riding on the success of smartphones and the availability of relatively cheap data in the country. Apart from the increasing smartphone and internet penetration, rising disposable incomes, a large young-user base, simpler controls and a diverse range of games for all ages have brought millions of new users into the gaming arena.
RV Technologies, 99Games and Juego Studios are some of the leading Indian game publishers offering games like Space Shooter 3D, Star Chef and the Hobbit on smartphones. However, the popular games amongst Indians are those developed by foreign companies. PUBG, Clash of Clans and Candy Crush Saga are some of the most downloaded games in the country. The development of more customised content with local themes and in regional languages catering to Indian sensibilities could help domestic players get ahead of the game. The simulation of Indian board and card games like Ludo, Snakes & Ladders and Teen Patti is already working in favour of Indian developers. Meanwhile, some of them are playing on the frenzy around celebrities and sports like cricket and kabaddi to create persona-based games like Bahubali, Sachin Saga and Dhoom3.
With Indians’ attitude towards technology softening, their perception of gaming is also changing. Once criticised for making children addicted, violent and aggressive, and hampering mental growth, gaming is now regarded by many as a mind-stimulating activity. That said, the World Health Organization has recently added “internet gaming disorder” to its manual of psychiatric diagnoses, which could lead to the tightening of norms around gaming.
While the popularity of gaming has grown hugely, it has not changed Indian mindsets sufficiently to make people pay for virtual goods. This is limiting revenue realisations from gaming. The unavailability of free alternatives could be a barrier to the uptake of paid games. Thus, gaming companies in India largely rely on the freemium model, which allows free downloads but charges for higher levels, more characters and specialised tools, basically anything that enhances the game. In such a model, developers get their returns from in-app advertisements or brand placements while keeping customers happy.
Profitable game: What’s in it for key industry players
The burgeoning Indian mobile gaming market presents huge potential for both local and foreign game developers and publishers, advertisers, investors, gaming equipment providers and smartphone manufacturers. In-app advertisements and product placements are a win-win for both advertisers and game developers. However, advertisements have been berated for ruining the gaming experience.
Apart from this, revenues are realised through in-app purchases under the freemium model, subscription services, pay per download, etc. Clash Royale, Subway Surfers and the majority of the other popular games in India are based on the freemium model.
Realising the potential of the Indian gaming market, several foreign players have also stepped up their investments in new gaming ventures in the country. Indonesia-based Go-Ventures, the investment arm of tech start-up Go-Jek, is finalising a $30 million investment in Bengaluru-based esports company, Mobile Premier League. Another start-up from the city, Mech Mocha Game Studios, is planning to raise up to $10 million from Japanese and Korean investors. In April 2017, Hyderabad-based online rummy portal Ace2Three had secured $73.7 million in funding from a consortium of investors led by Canadian firm Clairvest. Further, following the regulatory crackdown on gaming in China, the biggest gaming market at present, Chinese gaming companies are also likely to tap the Indian market.
Smartphone manufacturers are one of the key beneficiaries of the mobile gaming industry. The spending on high-end phones that provide a superior gaming experience is increasing. This will also lead to greater innovation in the space. ASUS has recently launched the ROG phone in India, designed specifically for high performance gaming. Makers of gaming gear such as augmented reality and virtual reality (AR-VR) headsets and wireless gaming controllers are also finding a market in India.
Virtual world: Technology that creates digital guns and swords
If not for technology, gaming wouldn’t be what it is today. Pokemon Go, an AR-based mobile game, captured everyone’s attention when it was launched two years back. It used GPS and AR technology to locate and capture virtual creatures in real locations, merging the real and virtual worlds. Such games can be used as a training ground by simulating real-world situations. Also, they challenge the whole premise of gaming being a sedentary activity, by building in physical activity. More games based on AR-VR are being developed to make gaming a more immersive experience.
Artificial intelligence (AI) is being used to design advanced and more complex algorithms to introduce self-teaching machines. This tool is useful in single-person games where a gamer is playing against machines. The advent of 5G will further improve this experience and take gaming to the next level. Some companies are using technology to develop games for people with special abilities. Meanwhile, big data analytics is being used by developers to devise sales and marketing strategies for keeping players hooked. On the flip side though, the user data could be misused.
Far from the finish line
Despite the huge growth in consumption, the Indian gaming industry is nowhere near that of the US and China in terms of original gaming content. Indian games are yet to hit the gaming stratosphere. To reach a point where gamers will happily pay for online games, Indian companies need to make the gaming experience even more compelling. They also need to come up with ways to address the social and health concerns associated with gaming. Many see only a fine line between gaming and gambling. As such, the government may tighten the gaming laws in the country.
Given that there are about 269 million mobile gamers and 337 million smartphone users in the country at present, more than 60 million users are waiting to be tapped, an opportunity that the gaming industry is keenly focused on.