Are We Ready to Accommodate the Huge Growth in Online Gaming?

By Bobby Garg, Founder, Rummy Passion

A much wider penetration of the Internet, coupled with widespread ownership of laptops and PCs, and most importantly the advent and proliferation of smartphones has meant that millions of Indians today can be a part of the online gaming community right through a device on their palms. The widespread popularity of games like Candy Crush, Angry Birds and Temple Run is testimony to the growing potential of the gaming industry. Hop on to the Delhi Metro for half an hour and every fourth individual you come across will be hooked to their mobile screen, playing their way to glory. No wonder, the gaming players in India today are working aggressively towards developing mobile gaming apps that give them a route to reach the last owner of a smartphone.

While the online gaming industry in western nations has matured, in India the market has only now started to take off in a big way. Therefore the attention of almost all global players is today fixed on capturing a pie of the growing market. At the same time, startups are also emerging as serious contenders to the market share, particularly as their offerings are better tailored to the local taste. As compared to a few years back when India was mainly an outsourcing destination for foreign gaming companies, the Indian market today has become a major target destination for which games are being designed and marketed. Estimates say that India today has more than 250 game developing companies, up from a mere 25 in 2010; and the number is growing.

The growth potential

While India accounts for a meager 0.55% of the global gaming industry at present, the same is likely to grow rapidly over the next few years. The changing gaming landscape in the country, penetration of Internet and smartphones and adoption of advanced gaming technologies are major factors that will drive the surge. The next five years to be precise are expected to witness monumental growth. India is already the second largest smartphone market in the world. According to the Internet and Mobile Association of India, India also has the third-fastest growing mobile app market in the world behind the US and Europe. The highly competitive environment of one-upmanship being witnessed by telecom service providers is further boosting the growth by enabling faster penetration of 3G and 4G services much beyond the metropolitan cities to even tier II cities and smaller towns.

A recent report released by the Confederation of Indian Industry (CII) and market research firm TechSci Research concludes that the Indian gaming industry is expected to reach USD 801 million by 2022 from a figure of USD 543.08 million in 2016. This gives it an expected compound annual growth rate of 6.61%. The industry today is around $890 million in size as per Nasscom with at least two companies coming up every month and growing at around 30 per cent every year.

The ‘desi’ touch

No matter the global dominance of Hollywood, in India Bollywood continues to rule the roost. Similarly, fusion products that infuse an Indian touch to western wear continue to dominate the dresses and garments market. The Indian customer’s love for the ‘desi’ touch is seen everywhere.

When it comes to the gaming sector, a number of globally popular games like Candy Crush enjoy huge popularity in India as well. However, the Indian market like always has an inherent demand for ‘Indianized’ products. This has led to the rise of a parallel vertical in the gaming industry that is developing online games especially for the Indian customer. This includes games that co-opt Indian mythology into the gaming scheme and card games that use Indian versions of 13 card rummy. This is a characteristic essential to the Indian market, and the gaming industry is set to focus heavily on this segment in the next few years.

The challenges

The picture however is not all rosy. A number of real time challenges continue to bedevil the sector and drag its growth rate.

One of the key challenges is shortage of talented gaming designers and programmers. While demand for this group of people has grown in recent years, a parallel growth in training and skilling has not taken place. We need to produce or train more software programmers dedicated to gaming. At the same time, we need programmers who understand the gaming modules and have a passion to improve them. With investors still to warm up to the sector, another key challenge is difficulty in procuring funding for gaming startups. A hit-driven business, gaming is looked upon as a risky venture by most investors who remain largely skeptical of investing into it. The lack of major wholesome investors means most start ups are bootstrapped and operate with limited monetary help. Incubation funds dedicated to the gaming sector and government support are highly needed to allow the industry to grow to its full potential. Last but not the least, limited penetration of virtual payment modes like credit cards is another hurdle that restricts many potential players from purchasing in-app games.

Resolving these challenges and improving the overall gaming infrastructure including Internet availability and speed will ensure the industry grows much more than expected over the next decade. The growth will also offer huge employment opportunities for gamers and designers.