Powered by Confidential and proprietary © 1Lattice October 2024 Foreword Praneet Singhal Ashish Dhir Director, Technology & Internet and 1Alpha Senior Director, Consumer and Retail In the dynamic landscape of digital entertainment, the Indian gaming industry is rapidly gaining prominence, drawing attention from both local and global audiences. With its rich diversity of gaming formats—ranging from casual mobile games to complex mid-core and hardcore experiences—India's gaming ecosystem has evolved into a vibrant and fast-growing market. This is fueled by the increasing penetration of smartphones, the expansion of high-speed internet, and the youthful, tech-savvy demographic. This report explores the various dimensions of the Indian gaming market, including its size, structure, key growth drivers, and the strategic initiatives shaping its future. The increasing involvement of institutional players, government initiatives, and strategic investments have further propelled the sector, opening new avenues for innovation and expansion. The industry's ecosystem now boasts a robust value chain with participants across development, publishing, and distribution, creating opportunities for both local and global stakeholders. As India establishes its presence in the global gaming landscape, there are significant opportunities for growth. The evolving dynamics of the sector present a promising outlook for continued development. We believe there is potential for the industry to expand further and encourage stakeholders to consider how they can engage with and benefit from this growing market. Executive summary • India's gaming market is expected to increase from US$ 3.7B in FY24 to US$ 9.8B by FY29, growing at a CAGR of ~20% - This growth is closely associated with mid-core and hardcore games, which are projected to grow at a CAGR of ~47% during FY24-29 and represent ~42% of the total gaming market by FY29 • Rapid expansion of the Indian gaming industry is driven on account of increasing smartphone penetration & internet users, rise in number of tech-savvy youth, and surging popularity of gaming influencers - India currently has 950M+ active internet users (FY24), ~820M+ smartphone users (FY23) and ~560M+ gamers (FY23) • Government initiatives are catalyzing growth in India's gaming sector: - The AVGC Task Force is established to develop AVGC-XR sector in India; this task force is currently developing the National Centre of Excellence (NCoE) in Mumbai to boost the growth in animation, visual effects, gaming, comics, etc. - Hosting the World Audio Visual & Entertainment Summit (WAVES) and organizing Esports tournaments, along with a National Game Jam, to further bolster the industry's expansion - Officially recognized Esports as a multi-category sports event in 2022 • Gaming industry is also witnessing strategic private investments for instance Nazara Technologies increased its stake by 48.42% in Paper Boat Apps and by 19.35% in Absolute Sports enhancing its position in the gaming and sports media sectors in 2024 Product in Spotlight: 1nsights Powered by 1nsights, our latest report, "Power Play: Insights into Gaming Market Dynamics," delivers a comprehensive analysis of the current gaming landscape. It categorizes various gaming segments, explores industry trends, and provides insights into consumer behavior and competitive strategies. 1nsights, our cutting-edge intelligence product, enables data-driven decisions by offering unparalleled access to extensive data, analysis, and forecasts. Discover how 1nsights not only informs but transforms your understanding of the gaming market, equipping you with the insights needed to stay ahead of the competition and refine your strategy in this rapidly evolving sector. AGENDA Market structure and opportunity 01 Participants in the gaming chain 02 Strategic initiatives 03 Gaming market structure Gaming market is segmented into three major categories based on the complexity and involvement of the players Gaming market structure Hyper-casual and Mid and hard-core Real Money casual games games Games (RMG) Super-simple, easy-to-learn Requires players to invest Interactive gaming where games designed for quick more time as compared to players wager real-world casual games. Players play sessions currency or its equivalent on require sharp reflexes, an uncertain outcome, with strategic thinking, and quick the potential to win a monetary prize decision-making to progress Note(s): *The list of the companies is not exhaustive © 1Lattice Source(s): Secondary research, 1Lattice analysis | 06 Indian gaming market Indian gaming market is currently at ~US$ 3.7B and is estimated to reach ~US$ 9.8B by FY29 Gaming market in India (US$ B, FY22-29P) CAGR (FY24-29E) ~20% 9.8 ~20% 0.1 4.1 ~47% 3.7 3.0 ~27% 0.05 2.8 0.6 0.03 0.9 0.6 0.5 2.6 ~4% 2.2 1.6 FY22 FY24 FY29P RMG Casual & hypercasual Midcore & hardcore Esports & others • India’s gaming market is expected to reach ~ US$ 9.8B by FY29, from ~US$ 3.7B in FY24 • Midcore and hardcore games will drive growth, supported by Key in-app purchases and ad revenues takeaways • Strong community engagement and localized content in games are expected to attract more players • Slower growth in RMG segment due to regulatory and ethical challenges Source(s): Industry reports, secondary research, press releases, 1Lattice analysis © 1Lattice | 07 Growth drivers: Gaming industry Improved engagement in gaming-related activities, growth of internet users, and technological innovations are the driving forces behind the Indian gaming industry Key growth drivers of the Indian gaming industry Increase in smartphone penetration and growth of internet users Improved connectivity and affordable high-quality smartphones have significantly boosted India's internet and smartphone user base, with a strong demand from rural and smaller cities Technological innovations Better smartphone hardware, gaming-specific models , and 4G/5G bands are driving robust growth in the emerging gaming sector Emergence of digital payments Digital payment systems enhancement led to seamless in-game transactions, subscriptions, and real-money game participation , expanding online gaming's user base Youth surge India's gaming market growth is strongly propelled by its young, tech-savvy demographic , with over 45% of population under 29 Surging popularity of gaming influencers The COVID-19 pandemic significantly boosted the popularity of gaming influencers, which has driven significant interests, new user acquisitions , and growth Improved engagement in gaming-related content and activities Improved user engagement in gaming, with more people playing games and interacting with gaming content than ever before Source(s): Secondary research, 1Lattice analysis © 1Lattice | 08 Growth drivers: Metrics Ongoing rise in user engagement has boosted the Indian gaming industry's growth # of gamers Internet users Smartphone users 950M+ 820M+ 560M+ Active internet users in India Smartphone users Gamers in India in FY 23 in FY23 in FY24, ~400M of them being from rural India Time spent Paying gamers Gaming app downloads 10-12 140M+ 9.5B+ Hours of average time Paying gamers in Gaming app downloads in FY23, spent per active user on India in FY23 contributing ~20% of the world’s gaming in a week total gaming downloads Indian gaming companies Developers & programmers 1,400 15,000 Online gaming startups in Game developers & FY23, up from just 25 in 2015 programmers in FY23 Source(s): Secondary research, 1Lattice analysis © 1Lattice | 09 AGENDA Market structure and opportunity 01 Participants in the gaming chain 02 Strategic initiatives 03 Gaming value chain Gaming value chain is a four-step process starting from developers to users / gamers Gaming value chain Distribution Developers Publishers Users / Gamers platforms • Oversees game • Manage funding, • Provide access Modes development producing, to games from concept to marketing, through both final release distributing, and digital and licensing of a physical • Conceptualizes ideas, codes, & game platforms Esports Mobile / graphics, and tablets Individual Digital tests games for publishers storefronts engagement and functionality Game development Access to games Streaming studios that via platforms with self-publish their digital download / games via subscription- crowdfunding based options Esport teams Computer & gaming hardware Audience Institutional publishers Physical Larger storefronts organizations who put the finished Involves selling game on the physical copies of market for the games through Console & AR / Sponsors world to play retail stores / VR devices e-commerce platforms Source(s): Industry reports, Secondary research, 1Lattice analysis © 1Lattice | 11 Participants in gaming value chain Key participants in gaming value chain Casual game developers Midcore & hardcore game developers Esports Teams Publishers Streaming Services Distribution platforms Note(s): *The list of the companies is not exhaustive Source(s): Industry reports, Secondary research, 1Lattice analysis © 1Lattice | 12 AGENDA Market structure and opportunity 01 Participants in the gaming chain 02 Strategic initiatives 03 AVGC Task Force AVGC Task Force drives growth, encourages collaboration, and helps expand national and international reach of the online gaming industry • The AVGC Promotion Task Force, announced in the 2022-23 budget, aims to set education standards, foster collaboration with industry and international institutes, and enhance India's global position in the AVGC sector • Focuses on innovation in content creation, generating employment opportunities, and prioritizing skill development and mentorship programs to drive sector's growth PILLARS for developing the AVGC-XR* sector in India Education, Enhancing Sector skilling, Access to sector’s Diversity and potential mentorship financial technology sustainability realization & capacity viability building Annual Includes Offering target Establishment Attracting Gaming Expo subjects & incentives to of incubators gaming-related & Game India teaching boost women & accelerators hardware Hackathon methodologies; entrepreneurship through FDI manufacturers; to foster MOCs with in AVGC-XR incentives, tax implementation innovation and global markets sector; benefits; of R&D grants collaboration; for internship encouraging exploring to support incubation opportunities; industries to collateral-free innovation; hubs & R&D evaluate tax adopt circular educational & establishment facilities for benefits & economy micro loans of technology startups import duties practices incubators Recent development • In September 2024, the Union Cabinet approved the establishment of a National Centre of Excellence (NCoE) for Animation, Visual Effects, Gaming, Comics, and Extended Reality (AVGC-XR*) in Mumbai • Modeled after premier institutions like IITs and IIMs , NCoE will provide cutting-edge infrastructure and specialized skills, fostering talent and innovation in immersive tech sectors such as Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) • Aims to create Indian IP , generate a multiplier effect in the industry, foster partnerships with states and academia, focus on integrated education • NCoE to generate 500,000 jobs , becoming a key hub for immersive technologies like VR, AR, MR • Partnerships with FICCI, CII, state governments, and academia to drive innovation and research • Serve as an incubator, providing essential resources to nurture s tartups and early-stage companies in the AVGC-XR field Note(s): *Animation, Visual Effects, Gaming, Comics, and Extended Reality Source(s): Secondary research, 1Lattice analysis © 1Lattice | 14 Institutional initiatives & strategic investments Institutional initiatives and strategic investments are catalyzing growth in the gaming sector, leading to a promising and positive outlook Recognition of Esports as an official sport Key strategic in India lent credibility to the segment collaborations • The Government of India officially • Strategic investments investors- SBI Mutual Fund, Nikhil Kamath, Plutus recognized Esports as a Wealth, ICICI Prudential Mutual multi-category sports event in 2022, Fund & others placing it under the governance of the Ministry of Youth Affairs and Sports • Acquires an additional 48.42% stake in Paper Boat Apps for INR 300 Cr & 19.35% stake in Absolute Sports for • India achieved notable success in INR 145.5 Cr, in July and September global esports competitions: 2024 respectively, strengthening its position in the gaming and sports - Secured the bronze medal in the media sectors Dota 2 open category at the inaugural Commonwealth Esports • Plans to invest ~US$ 150M to Championships 2022 in support interactive entertainment Birmingham, UK startups over the next 2-3 years - 15-member Indian Esports • A separate incubator to assist 6 to contingent participated in the 2022 10 teams annually, with investments Asian Games, competing in four of ranging from US$ 50K-150K per the seven titles: DOTA 2, FIFA Online team 4, League of Legends, and Street Fighter V: Champion Edition • Zupee has joined the government- backed e-commerce platform ONDC, • Government of India hosts the World making its skill-based games more Audio Visual & Entertainment accessible to a broader audience Summit (WAVES) to bolster India's Media & Entertainment industry and extend its global influence (under • Sony Interactive Entertainment Create in India Challenge season 1) launched the PlayStation India Hero Project in 2023, providing Indian • A National Game Jam organized for developers with resources, college students, game mentorship, and tools to help them development enthusiasts, and complete their games young developers • Following the success of the first • Esports tournaments featuring cohort, a second cohort was eFootball, WCC, and BGMI held in launched in 2024 to boost support four batches from August to further November 2024 Impact and way forward Diverse opportunities and Accelerated growth and institutional support: professionalization: Institutional recognition will showcase Increased investments and government diverse gaming titles, creating career paths support will drive growth, enhancing and advancing the industry with robust professionalism and attracting platforms and initiatives sponsorships in the Indian gaming events Source(s): Secondary research, 1Lattice analysis © 1Lattice | 15 At 1Lattice, we address the problem statement and serve as the one-stop platform for all your knowledge and decision support requirements (1/2) Intelligence Input Validate Execute Measure & Insights • Market assessment, • PMF test / • Time motion • SOP / process TAM, SAM feasibility studies studies audits • GTM planning • B-plan validation • Brand health track studies • M&A landscape scan • Competitive landscape & scan • B2C Qualitative • Segmentation and • Campaign • Tracking panels research personas evaluation • NPS studies • B2C Quantitative • Customer journey • Customer research mapping retention and loyalty analyses • UI / UX testing • B2B Qualitative • Account potential • Customer • NPS health check research assessment retention analysis • Sales force • 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Praneet Singhal Ashish Dhir Director, Technology & Internet, and 1Alpha Senior Director, Consumer and Retail E: praneet.singhal@1lattice.com E: ashish.dhir@1lattice.com For media queries, Vaishnav Kumar Rai Manager – Corporate Communications please contact E: communications@1lattice.com M: +91 782 794 4925 www.1lattice.com Disclaimer: This material has been prepared by 1Lattice, which is the trade name of Lattice Technologies Private Limited (“1Lattice”, “we” or “our”) with the intent to showcase our capability and disseminate learnings to potential partners/clients. This material can be referred to by the readers on the internet but should be referenced to 1Lattice, if reused or adapted in any form, or medium and on any forum. The frameworks, approaches, tools, analysis and opinions are solely 1Lattice’s intellectual property and are a combination of the collection of the best data we could find publicly, and the 1Lattice team’s own experiences and observations. 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