For many gaming companies, investments raised this year has been diverted towards marketing and technology to enhance user experience
The market value of Indian gaming segment is likely to grow to more than Rs 25,000 crore by 2024.
2020 saw the world getting used to virtual life and online gaming turned out to be a favourite among people. The scene in India was no different, as online gaming saw a huge rise. Investment in the gaming sector increased 78% to $173 million in CY2020 (Jan-Dec) as compared to $97.1 million in CY2019, as per data provided by Tracxn Technologies. According to Niti Aayog’s report titled “Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India”, the fantasy sports industry in the United States (US) was the largest in the works, till the Indian industry overtook it ‘recently’.
As per industry estimates, India has over 300 million gamers today with gaming platforms recording almost 45-60% increase in time spent during the lockdown. Much of the growth has been driven by affordable Internet connectivity as well as rise in penetration of smartphones. “Online games are not just a one person entertainment experience but have now become full-fledged virtual social spaces, so we will continue to see time spent on games going up. New game titles will arrive next year and this will really deepen the gaming category, which will ensure that in a year or two from now, we will be discussing depths of individual games and not just the category itself,” Anirudh Pandita, founder, Pocket Aces, told BrandWagon Online.
Interestingly, gaming firms claim that most of the fund raised has been diverted towards marketing and technology as the aim is to enhance user experience. For Parth Chadha, founder, EWar Games, lockdown has proven to be a blessing in disguise as it has allowed people to explore online games. “We saw a good boost in casual gaming and on the esports/streaming product as well. We last raised funds in February 2020 and leveraged that money to optimise the product. We continue to post month-on-month,” he explained. EWar Games claims to have witnessed 3x month-on-month growth. As per the firm on the back of the growth it has raised $200,000 from the House of Jindals (family office) and Jeet Banerjee, founder of Gameplan, a sports management firm based out of Kolkata. Furthermore, the esports platform is in the process of closing a fresh round of investment. “We plan to divert the new fund towards marketing our existing products besides driving revenue. We will also invest in game-changing technologies to complement the growing esports segment,” he added.
As per Tracxn, some of the big investments include $90 million in Mobile Premier League (MPL) by a clutch of investors including Pegasus Tech Ventures, Sequoia Capital and Times Internet; $40.1 million in JetSynthesys by DSP Group, Jetline Group and Triveni Engineering & Industries, and WinZO raising $18 million in equity funding by a bunch of investors including Kalaari Capital.
However, while the industry soared high, it has faced its own set of challenges. Some of the states such as Assam, Orissa and Telangana, have made fantasy sports illegal, while, Tamil Nadu recently passed an ordinance that bans “online gaming” but doesn’t explicitly mention fantasy sports platforms. Furthermore, the concept of esports, online gaming, fantasy sports and real money gaming remains a bit blurred due to lack of clearance, stemming confusion and general suspicions regarding the sector. Industry analysts believe that this might hinder further investments into the sector in the upcoming years. “From a regulatory point of view, there is a bit of uncertainty in the sector on what is permitted and what isn’t. This could impact some of the international players from coming into the market next year,” Ashish Pherwani, partner, Media and Entertainment, EY, said.