The Indian market has increasingly become a focal point for game developers and publishers who see its huge potential install base, young audience and the world’s second-largest internet market as a great opportunity for growth in coming years. After all, the Indian gaming industry generated $2.6 billion last year and has seen ongoing growth.
However, Indian VC fund Lumikai’s latest report paints a slightly less bountiful picture, predicting a $1 billion fall from prior estimates on India’s revenue by the 2028 financial year. In the past, Lumikai projected that the Indian games industry would generate $8.6 billion revenue by 2027 - a value also predicted by marketing intelligence firm MoEngage. But now the VC fund has slashed its forecast, estimating $7.5 billion instead, and one year later.
A good year
Lumikai’s report shows that $3.1 billion in revenue was generated in financial year 2023, up 19% from $2.6 billion in 2022. Overall, real-money games' revenue increased by $500 million, so clearly the industry is still a growing one full of potential, just not quite as quickly as previously predicted.
Of the 568 million gamers in India this year, a total of 140 million spent money on games in a 17% increase over last year. The total number of gamers is up 12%, meaning the overall proportion of paying players has risen too. This also means that more than half of all Indian internet users are playing games.
While all gaming platforms are considered in the report, Lumikai notes that the mobile-prevalent casual and midcore genres are integral to the country’s predicted growth, with their in-app purchase revenues a driving factor along with in-game advertising. After all, 96.8% of India’s gamers are playing on mobile.
Notably, the total percentage of metro-based Indian gamers has fallen this year, with non-metro gamers on the rise. They have taken a substantial lead now, having increased from 57% of the country’s gaming population last year to 66% this year. Roughly half of them are aged between 18 and 30, and 60% are male.
"Indian gaming has been on the rise because of rapid digitisation, growth in new gamers and new paid gamers, and increasing diversity of gaming content consumed. Even though funding has slowed down this year, the outlook towards the gaming industry is extremely positive," said Lumikai founding general partner Salone Sehgal.
This summer, PUBG maker Krafton committed to a $150 million investment into the Indian gaming market after already committing $140 million in the past three years.