India's Online Gaming Market Grew 35 Percent In 2022

May 5, 2023
India’s online gaming market grew 35 percent to 135bn rupees ($1.7bn) in 2022 and is expected to almost double to 231bn rupees ($2.8bn) by the end of 2025, according to an Ernst & Young (EY) report.


India’s online gaming market grew 35 percent to 135bn rupees ($1.7bn) in 2022 and is expected to almost double to 231bn rupees ($2.8bn) by the end of 2025, according to an Ernst & Young (EY) report.

The April report, which is part of a joint review with the Federation of Indian Chambers of Commerce & Industry (FICCI) into India’s media and entertainment sector, found that the national online gaming market now boasts 421m gamers, including 90m to 100m “frequent” players.

Revenue for “transaction-based” (wagering) games, including online rummy, online poker and fantasy sports, reached 104bn rupees in 2022, rising 39 percent against 2021, while “casual gaming” including esports and in-app purchases rose 24 percent to 31bn rupees.

The data excludes personal computer and console gaming revenue, as well as revenue from the prohibited segments of sports betting and chance-based games.

Revenue for online poker and rummy, which are bearing the brunt of political and judicial controversy, grew 44 percent in 2022, driven by analytics-enhanced player retention, better marketing and player trust, and the nourishing of game communities “to increase engagement levels”.

The report attributed the increase in overall growth to improved public perception of online gaming activity, significant marketing outlays and “brand ambassadors”, evolving payment channels and more sophisticated industry analytics.

It also notes the expansion of broadband connectivity into India’s less populous cities, along with “cheaper data costs and affordable smartphones”.

A further driver of growth is diversification through use of local languages in gaming interfaces.

“It is estimated that over 60 percent of internet users converse in regional languages,” the report says.

“Hence, many game developers in India have started offering games in regional languages, along with Hindi, such as Gujarati, Marathi, Tamil, Telugu, Kannada and Bengali to attract them.”

Meanwhile, industry marketing strategies are accelerating, it said.

“Brands are now exploring online gaming worlds to launch products, hold events and enable new monetisation opportunities,” it said. “We expect there will be over 50 large online gaming tournaments in 2025.”

The report added that subscription business models are set to be enhanced by 5G and cloud gaming capacity, and that certain game play will “increase significantly” with the sharing of sports media rights between four major media outlets.

Although revenue increased dramatically in 2022, the increase in the number of online gamers was more marginal, rising only 8 percent, suggesting a marked increase in average player spend.

The report also predicted slightly smaller growth in market player growth for 2023 at 5 percent, suggesting further acceleration in average player spend.

The report’s optimism for the market is based in part on the implementation last month of formal online gaming rules under information technology legislation that emphasise self-regulation and compliance upgrades.

“The introduction of formal online gaming rules will enable privacy and security for gamers’ information and can aid in the increase of online gamers due to increased transparency,” it said.

“Regulation, once set, provides clarity and growth.”

Some legal observers continue to express caution, however, given that the rules prohibit “wagering”, an undefined term, with requests for clarity from appropriate ministries going unheeded to date.

“If the government framework is implemented with care and trust, India will have explosive growth in gaming,” the report said.

The Supreme Court of India is on the verge of testing the legality of online gaming with stakes, with an appeal by state governments seeking to ban all online gaming to begin this Monday (May 8).

The VIXIO GamblingCompliance Podcast · Episode 54. The Big Melt: Online Gaming Liberalisation in India

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