Online gaming continues to grow, but GST change to “moderate” monetisation: report.
Even though the base of online gamers willing to make payments continues to grow, the recent increase in the goods and services tax (GST) will “moderate” monetisation per user, a joint report by real money gaming (RMG) firm Winzo and non-profit firm Interactive Entertainment and Innovation Council (IEIC) said.
“Pay to Play games have historically been the largest revenue source and key driver for India’s gaming sector. Its share will mellow down over the next five years on account of high tax burden… While the industry fundamentals will lead to a growing user base over the years, such growth will not translate into equivalent user monetization on account of recent tax policies,” according to the report.
Besides Winzo, the IEIC also counts investors like Courtside Ventures and Griffin Ventures, as well as gaming studios like Hashbyte Studios and Chennai Games, among its members. IEIC works like a think tank to help investments flow into gaming firms in India, Saumya Singh Rathore, co-founder of Winzo, said.
India currently has about 560 million gamers, of whom 144 million paid for games in 2023, the report said. By 2028, the total gamer base might reach 916 million, with 240 million of them paying for games, it added.
Currently, about 5.8% of overall domestic gaming spending comes from in-app purchases. Such spending is forecast to grow at about 35% compound annual growth rate (CAGR) during 2023-28, with the share of overall domestic spending rising to 13.6% by 2028, the report predicted.
The Indian gaming ecosystem is slated to grow at 14% CAGR to reach a revenue of $6 billion by 2028, the report said.
The share of non-RMG games will rise to 21% of the overall gaming market by 2028, from the current 13%, the report said. “Battle royale games have been instrumental in demonstrating that mobile gaming has the capability to catch the attention of the nation,” it added.
Battle royale games like Krafton’s BGMI and Garena’s Free Fire Max are among the most popular non-RMG online mobile games in the country, ET had earlier reported.
Meanwhile, the Indian gaming ecosystem has raised $2.6 billion from domestic and global investors since 2019. The number of Indian game development companies have also grown, from 25 in 2015 to over 900 in 2023, the report said.