Once upon a time, the poker game was seen as a test of skill and experience played by a select few in India. But now real-money games have made online gaming a multi-billion-dollar industry. Online gaming in India grew by 28% CAGR in the three years till 2023 and is poised to grow at 15% for at least five more years. At the heart of this growth is the popularity of real-money game apps.
Millions of Indians are finding the charm in arranging their rummy and poker sequence and showcasing their skills on virtual platforms and tournaments. This zeal has ensured that real-money games contribute nearly 83% of online gaming revenue in India and continue to do so in the coming years.
A Much-Anticipated Government Backing
The gaming industry has been fighting challenges on multiple fronts with government bodies and lawmakers. Real-money games have emerged successfully from the identity question they were facing. The clear demarcation of real-money games from other games of chance meant that the skill vs chance question was put to rest.
A steep GST burden jeopardised to eat into the margins of the real-money game apps. Many platforms encouraged gamers to use discretion in withdrawals to avoid repeated GST charges. Instead, they are encouraging gamers to retain their balance. Besides, some platforms have also tinkered with winning brackets without risking the alienation of their patrons. However, as a long-term solution, industry members are also expected to advocate a shift of the tax burden from full face value to gross gaming revenue, as it is done in countries like Denmark, the UK, Italy and Australia. A review of the tax rates by the government is also on the cards.
Also on the cards is the establishment of Self-Regulatory Bodies (SRBs) to evaluate the industry and carry out certifications. The industry expects the government to either implement these SRBs or Ministry of Electronics and Information Technology (MeitY) guidelines to give the industry the necessary regulatory framework.
Some of these expectations could be in motion after the general elections are over. These steps can go a long way in helping the industry in its growth journey.
Sharp Growth and Strong Forecasts
While real-money game apps eagerly anticipate initiatives from government bodies, the private sector has already started enriching the ecosystem in India. Google has expanded its Play Store policy to accommodate real-money game apps that are recognised in India. The search engine has waived the earlier requirement of an SRB to allow real-money game apps into its Play Store. A similar decision was also taken by PhonePe as its Indus Play Store has started onboarding these apps.
With more than 400 startups in the sub-segment and three unicorns, real-money games are the hard hitters in the Indian gaming ecosystem. It has expanded its reach among tier-II and tier-III audiences, which is evident from the increase in paying gamers from 22% to 25% of total gamers. The total enterprise valuation of the real-money games sub-segment in India is in the region of ₹ 1.6 lakh crores.
The share of paying gamers is expected to increase to 34% in the next five years. This is a welcome prediction for real-money game apps, as well as e-sports and other non-real-money apps. The latter two, in particular, lag behind real-money game apps in terms of market share and are expected to grow at a higher rate. Nevertheless, driven by the volume of growth, real-money games are expected to grow at a healthy CAGR of 13% till 2028. During this time, it is expected to contribute between ₹ 6,500 to ₹ 6,800 crores in direct taxes and between ₹ 75,000 to ₹ 76,000 crores in indirect taxes to the government during the financial years 2024 and 2028.
Creating Synergies and Exploring Investor Interest
Although buoyed by unprecedented success, real-money game apps have no time to rest on laurels. Its presence in the digital space demands an ongoing push towards innovation. More and more real-money game apps like Pocket 52 are adopting deep tech innovations like augmented reality and virtual reality, machine learning and advanced analytics, and blockchain technology. These technologies are enhancing the gaming experience, streamlining the payment processes with fintech involvement and adding more security to the gaming infrastructure.
It is also expected to draw continued investor interest in the sub-segment. So far, real-money games have attracted around $2.5 billion in investment, while another $4 billion is expected in the next three to four years. This will fuel the apps to explore further into the market, widen their offerings and invest in future-ready innovations.
A Continued Growth
The last few years have seen the emergence of real-money game apps as a dominant force in the gaming landscape. The sub-segment awaits stronger government backing and recognition as it consolidates its position in the market. Through their growth journey, real-money games have attracted millions of gamers while raising impressive tax revenue as well. As the real-money game apps in India push towards cutting-edge tech excellence and market exploration, these seem to be on track to continue their forecasted growth.