India's gaming market surged by 23% year-on-year, reaching $3.8 billion in revenue in FY 2023-24, even as the sector faces a 28% GST on online gaming, recent reports reveal. Driven by robust in-app purchases and steady ad revenues, India's gaming industry is on track to surpass $9.2 billion by FY29, with a projected five-year compound annual growth rate (CAGR) of 20%.
Currently, real-money gaming (RMG) leads the sector, contributing approximately $2.4 billion to total revenue. However, in-app purchase revenue grew the fastest in FY24, surging by 41% year-on-year. By FY29, in-app purchases - growing at a CAGR of 44% - are expected to overtake RMG, as gamers increasingly opt for casual and mid-core games over RMG, signaling a shift toward recreational gaming.
Revenue from mid-core games exceeded expectations, growing 53% in FY24, while casual games saw a 10% boost in in-app purchase revenue. Ad revenues held steady despite a global slowdown in ad spending. Notably, 25% of Indian gamers made in-game purchases in FY24, motivated by options to unlock content and upgrade in-game items.
RMG companies, impacted by the GST hike, maintained their topline growth with $400 million added in FY24. Yet, gross margins fell by 30% as payback periods nearly doubled, challenging smaller firms' working capital while larger players absorbed costs.
India's gamer base expanded by 23 million in FY24 to a total of 590 million players, with an average weekly gameplay time increasing from 10 to 13 hours. A demographic shift also emerged, with women making up 44% of the gaming population, and 66% of gamers hailing from non-metro areas. Younger, first-time earners aged 18-30 show high spending potential, particularly in non-metro cities, marking a promising outlook for India’s gaming industry.
CAclubindia
