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India's Online Gaming Segment to Hike up to Rs.29,000 Crore by 2025: KPMG

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The Indian online gaming segment is expected to grow more than double reaching Rs.29,000 crore by 2025, according to a KPMG research, with 65.7 lakh users. According to the analysis, the online gaming industry will be worth around Rs.13,600 crore in 2020-21, with 43.3 crore gamers.

In addition, India's online casual gaming sub-segment, which was worth 6,000 crore in FY21, is expected to expand at a CAGR of 29 percent to reach 16,900 crore in FY25, according to the report.

According to the firm's analysis titled 'Beyond the tipping point - A primer on casual gaming in India', the online casual gaming sub-segment accounted for 44 percent of the country's overall online gaming sector in FY21 and is expected to reach 58 percent by FY25.

When it comes to the users, the sub-segment holding about 42 million gamers in FY21 accounted for 97 percent of all gamers in India, and is anticipated to hold this position until FY25.

The sub-segment, however, was considerably under-indexed on monetization, according to the KPMG analysis, with lower ARPUs (Average Revenue Per Unit) than other gaming economies such as Indonesia, Malaysia, and South Africa.

the arrival of ecosystem enablers like esports and game streaming, online casual gaming is likely to appeal to both the general public and professionals. In the years ahead, we expect the online gaming market to be one of the most important parts of the M&E industry in India, capturing a piece of both the time and the wallet of the Indian digital billion”, Menon noted.

“Among overall online gaming, the online casual gaming sub-segment in India has emerged as the largest in terms of consumption,” said Girish Menon, partner and head, media and entertainment, KPMG in India.

By 2020, the sub-segment had reached a tipping point, with consumption and engagement reaching all-time highs. It has enormous growth potential.

"Furthermore, with the arrival of ecosystem enablers like esports and game streaming, online casual gaming is likely to appeal to both the general public and professionals. In the years ahead, we expect the online gaming market to be one of the most important parts of the M&E industry in India, capturing a piece of both the time and the wallet of the Indian digital billion”, Menon noted.

Meanwhile, the country's overall online gaming sector, which was valued at 13,600 crore in FY21, is expected to increase at a CAGR of 21 percent from FY21 to FY25, reaching a total value of 29,000 crore.

As per the analysis, the online gaming segment has developed rapidly over the last three to four years and is now battling with traditional forms of entertainment for the share of time spent on media and entertainment in a day.

While the economy and traditional segments of the M&E industry suffered as a result of the COVID-19-induced lockdowns, online gaming as a segment grew in terms of both consumption and, to a lesser extent, monetization. According to the report, India had the largest game downloads in the casual mobile gaming sub-segment in the world (excluding China) in 2020, with 7.3 billion downloads in Q1-Q3 2020, accounting for 17 percent of all worldwide mobile game downloads.

After lockdown in 2020, monthly active users for the top 100 mobile games increased by 10-15 percent, as did time spent on online gaming.

Furthermore, with technologies such as cloud gaming on the horizon and the adoption of cutting-edge AI/ML-driven technologies, online casual gaming in India was becoming a serious business, according to the analysis, for both ecosystem participants and investors.

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