The EGROW Foundation has come out with a new research report titled ‘India’s Booming Online Gaming Industry: A Potential Powerhouse’. It is a non-profit, multi-disciplinary public policy organization working in association with Primus Partners, India’s leading homegrown consultancy firm. This report outlines the exponential growth and potential of India’s online gaming sector and its contribution to the AVGC industry, touted to increase by 68 per cent by 2026.
The research findings indicate that the online gaming industry is on its way to become one of the significant employment-generating industries in the coming years. From 2018 to 2023, the CAGR of employees in the online gaming industry has been at 97.5%. In the case of the male workforce, it has grown by 69.88 percent, and its growth for females is fabulously 103.15 percent. The steady growth on bothgender lines indicates the growing appeal of the industry and further sostabilities in driving other economic opportunities in the Indian Labor Market.
Dr Charan Singh, CEO & Founder Director, EGROW Foundation, argued that “the Indian online gaming industry is one of the prime contributors to our economy and an important source of employment and innovation. At 455 million gamers in 2023, India is the second biggest gaming community in the world after China. This sunrise industry offers huge opportunities in terms of attracting FDI, creating jobs in various fields, and encouraging investment.”. “Besides, it is likely to kick off a host of allied industries like fintech, cloud services, data analytics, and cybersecurity.”
Nilaya Varma, Co-Founder & CEO, Primus Partners, mentioned, “The Indian online gaming industry showcases a vibrant and promising landscape that is full of potential for economic growth and job creation. However, steering through the recent changes in the framework of GST would be critical for online gaming platforms to sustain their growth trajectory.”
In the course of research, the surveyed companies have identified key problems that have had the impact of undermining the growth of the online gaming sector. The most prominent was regulatory uncertainty in the sector. With the long delay in establishing Self-Regulatory Bodies under the IT Rules, business operations are being adverse and allowing market share to slip away to offshore operators. The retrospective taxation demands of Rs 1.2 lakh crore to gaming companies are threatening to destroy economic value and can devastate the industry.
Another pending issue is the recent deposit taxation at a rate of 28% that some firms are seeking a lower rate and a return to the earlier valuation method based on gross gaming revenues, which is more conducive to growth and inviting investment. These companies say this set of revised IT Rules should result in a national regulatory framework, further clarification on retrospective taxation, and notification by the National Policy for Promotion of the Animation, Visual Effects, Gaming, and Comics sector.
A few of the major highlights in the report are:
The contribution of the online gaming sector to M&E is expected to rise from 3.4 per cent in 2019 to 10.5 per cent in 2024 and further grow up to 12.6 per cent by 2026.
The contribution from this segment of online gaming to AVGC will rise from 41% in 2019 to as much as 68% in 2026.
Workforce growth in the industry has surged manifold times from 2018 to 2023 and is supposed to have a strong 97.56 percent CAGR for the said period—an indicator that truly proves the sector’s mettle in terms of job creation.
Key findings indicate that the women workforce in this industry has grown by 103.15 percent CAGR between 2018 and 2023.
The sector recorded an annual turnover growth rate of 168.06 percent CAGR from 2018 to 2023.
If one compares the growth rates of India’s online gaming industry with those of other major countries in gaming, one can trace that in the last six years, India has grown the most at a CAGR of 30 percent from 2017 to 2023.
These include the report’s vision for the huge potential of India’s online gaming sector as a major driver for economic growth, providing employment and opportunities for innovation. If regulatory uncertainty and taxation issues are ironed out, there will be continuing growth in this sector. Provided the right policy framework, India’s online gaming sector would function better, empowering it to bring in foreign investment and much more in terms of opportunities across many other ancillary industries.
