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India’s online gaming craze is a multi-crore business

Smitha Verma | Updated on October 12, 2020 Published on October 08, 2020

Forget teenyboppers hunched over devices all day, Indians of all ages are turning into avid gamers, with the steady trickle surging into a flood during the lockdown — a whopping 365 million players at last count. Powered by celebrity endorsements, regional language interfaces and big sponsorship money, the country’s online gaming industry is blazing through to ‘advanced levels’. The projected $2.5-billion behemoth is expected to overtake even cinema in the entertainment stakes in the coming years

* Online gaming grew at 40 per cent during 2019-20 in India, according to a 2020 report by Ficci and Ernst & Young

* In April, when Paytm First Games, a fantasy sports gaming platform, organised a real-time multiplayer game called Clash Royale Tournament, it witnessed over 11,000 registrations in India

* In 2019, Dream 11, India’s first gaming unicorn, became the official partner for the IPL for ‘fantasy games’

The ongoing Indian Premier League (IPL) in the United Arab Emirates keeps Aditya Puri* busy. He closely follows the best players in the game and meticulously tracks the pitch and the weather. No, he is neither a cricketer nor an IPL team owner. He is an avid gamer who has created his own cricket team on a popular gaming platform. He derives points and earns money based on the performance of his chosen players in the tournament.

“It’s a skill to pick the right players. You have to work out several permutations and combinations to get it right,” says the 32-year-old Mumbai-based investment banker who plays poker when he is not putting together his fantasy team.

Puri strayed into the online gaming world sometime in April, when the pandemic and the ensuing lockdown forced him to stay home. In the pre-pandemic world he used to play cricket for a local club and enjoyed visiting casinos during his travels. In the new world order, online gaming gives him “just about the same thrill”.

And like Puri, much of India has moved from playing on field to bingeing on virtual games.

In April, when Paytm First Games, a fantasy sports gaming platform, organised a real-time multiplayer game called Clash Royale Tournament, it witnessed over 11,000 registrations in India. Players competed to win prizes from a pool of ₹4 lakh, and the final rounds were live-streamed for 1,800 hours on YouTube and Paytm Inbox, an in-app feature where you can chat, play games and so on.

“We had over 70,000 viewers for the tournament streams. On popular demand, we have now launched Clash Royale Championship, which will be a year-long event of four tournaments,” says Sudhanshu Gupta, chief operating officer, Paytm First Games.

Online gaming is no longer a casual activity dominated by teenagers hunched over a gaming console. People of all ages are logging in to these multi-crore leagues, even as celebrity endorsements are pushing advertising spends, the gaming interface has adopted regional languages, and big-ticket sponsorship deals are being signed.

In 2019, Dream 11, India’s first gaming unicorn, became the official partner for the IPL for ‘fantasy games’ — where participants have virtual matches with imaginary teams made up of actual players from different teams.

Last month, master cricketer Sachin Tendulkar became the brand ambassador for Paytm First Games.

Mobile Premier League (MPL), an e-sports and mobile gaming platform, is now the presenting sponsor for the latest season of reality show Bigg Boss 2020, besides sponsoring two IPL teams — Kolkata Knight Riders and Royal Challengers Bangalore.

Amin Rozani, group chief executive officer of online gaming platform Spartan Group

 

“An online gaming platform is a lot more scalable as overheads are a lot less. It is a lot more convenient for a player to engage in and we can reach out to any part of the country,” says Amin Rozani, group chief executive officer, Spartan Group, an online gaming platform.

Sport on

Arguably, 2020 is the year for online gaming.

“You could certainly say so,” stresses Ashish Pherwani, partner and media & entertainment leader at the consultancy firm Ernst & Young (EY) India. A 2020 report on India’s media and entertainment sector, released by the Federation of Indian Chambers of Commerce and Industry (Ficci) and EY, claims that online gaming grew at 40 per cent during 2019-20 in India, making it the fastest growing segment in this space. “Online gaming by 2025 will be the third in the pecking order in the media and entertainment segment [after movies and music],” Pherwani adds.

The total revenues generated in 2019 stood at ₹6,500 crore. The report puts the number of gamers in India at around 365 million. Not surprisingly, Reliance Industries chairman Mukesh Ambani recently said at a meeting in Mumbai with Microsoft boss Satya Nadella that in the coming years online gaming would overtake cinema, music and TV in India.

There are several factors fuelling the surge.

“The change in user approach, increasing smartphone affordability and penetration, digital infrastructure and substantial rise in quality and engaging gaming content are driving this growth,” says Roland Landers, chief executive of the All India Gaming Federation, an industry body formed in 2016 for online skill gaming in India.

The online gaming world consists of games of skill and games of chance. Games of skill are legal in the country except in states such as Andhra Pradesh, Assam, Telangana, Nagaland and Odisha. Games of chance (such as the card game Teen Patti) are termed gambling and held illegal.

“One of the key challenges is that gaming is a state subject while gaming businesses are online and digital. The absence of comprehensive regulations in the gaming sector makes the subject complex. In addition to this, most of the state gaming Acts are archaic and were brought into effect much before the internet era,” Landers rues.

Regulations notwithstanding, the industry is headed north.

Harsha Bhogle, cricket commentator, is the face of Fantasy Akhada and an investor

 

Fantasy Akhada, a fantasy sports platform that started operations in January 2020, boasts 1.5 lakh users, who have collectively participated in more than 1 lakh contests and earned close to ₹5 crore in winnings.

Last month, cricket commentator Harsha Bhogle picked up a stake in this start-up and he will be the brand’s face for the next two years. Fantasy Akhada currently offers fantasy cricket and fantasy football, where users can take part in contests to guess who will win a match, create an imaginary team and so on.

“We got popular because, besides customer-centricity, we have a Predictions Module, which allows casual fans to come on the platform, correctly predict the outcome of an ongoing cricket or football match and win coins that can be redeemed for exciting offers,” says Amit Purohit, founder, Fantasy Akhada.

It’s not surprising that the Ficci-EY report predicts that online gaming will continue to see a robust compounded annual growth rate of about 43 per cent over the next three years. It is estimated to become a $2.5-billion industry and account for over 40,000 direct jobs in the country.

Gaming companies typically make money when users make in-app purchases and through advertisements. If you want to opt for an ad-free gaming experience, then you have to pay a premium fee.

New deals

In the crowded gaming market, companies are forced to innovate to attract users.

Some offer instant cash withdrawals, some free lessons on gaming and some lower rates. “We are the only platform so far to offer a ₹99 season ticket, which enables our users to play fantasy contests for free throughout the duration of the ongoing tournament. We also have full cashback for new users joining MPL,” says Shubham Malhotra, MPL co-founder. Currently, MPL offers over 60 games for its 60 million users in India.

Clearly, the lockdown has emerged as a boon for the industry.

Loco, a live game streaming and e-sports app, witnessed a six-fold growth in daily active users (DAUs) in July 2020. Their monthly active streamers too went up by 122 per cent month-on-month from June to August 2020. MPL saw a 700 per cent increase in terms of the number of games played.

As IPL 2020 was deferred there was no sport whatsoever across the world in the months of March and April.

At this point Ludo King, developed by Mumbai-based Gametion Technologies, became the lockdown king of the gaming world. It was the first Indian gaming app to cross 100 million downloads, with a 142 per cent jump between February and April.

“During the early stage of Covid-19, due to lack of cricketing events, we started introducing new sports segments (such as basketball and baseball) and the results were promising,” says Mitesh Gangar, co-founder, Playerzpot, a fantasy sports portal.

Evolving landscape

The gaming landscape is getting lusher by the day.

In September, the Union government banned several Chinese apps, including PlayerUnknown’s Battlegrounds, more popularly known as PUBG. The multiplayer online shooting game, which was launched in India in 2018, had over 200 million users here.

“The PUBG ban is expected to slow down e-sports growth in India as most tournaments’ and platforms’ investments in India were around PUBG Mobile. So it’s definitely a bit of a stumbling block for the industry as a whole,” says Ishaan Arya, co-founder and head of business development, The Esports Club, a Bengaluru-based e-sports platform.

The company recently announced a pro league championship around the popular online game Tom Clancy’s Rainbow Six Siege — an online shooter video game inspired by counter-terrorist operatives — with a cash prize of ₹10 lakh. “While a lot of people have certainly explored other alternatives, the PUBG Mobile popularity will be hard to replace or emulate,” he adds.

Not everyone agrees.

Made-in-India mayhem FAU-G, a game endorsed by actor Akshay Kumar, will be released in end-October

 

Two days into the ban, Bengaluru-based nCore Games announced the launch of FAU-G (Fearless and United Guards), a shooting game endorsed by actor Akshay Kumar. It is slated to be released by the end of October.

Vishal Gondal, founder and chairman of Bengaluru-based nCore Games

 

“In India, the challenge is that there are not many developers creating Indian IPs (namely, developing a game from scratch in India),” says Vishal Gondal, founder and chairman of nCore Games. High-quality game development demands large capital infusion, which investors are not keen on for fear of returns. “All the games in the top 10 are foreign games, except for Ludo King, and consequently all the money as investment is going into fantasy games or the semi-gambling games. There is a massive lack of local IP. That’s why we decided to launch FAU-G,” adds Gondal.

A veteran gamer himself, he believes that the time has come for more Indian IPs to develop local games the way Netflix and Amazon Prime Video localised content for Indian audiences. Gondal may strike a chord with the audience vying for ‘Make in India’. His game is based on real-life threats encountered by Indian security forces. Players will have to collaborate and fight the enemy. The first level is set in the Galwan Valley, the site of a recent deadly clash between Indian and Chinese troops at the Line of Actual Control.

Diversified segments

So what exactly does online gaming involve?

The three major segments are real-money games (poker, rummy), casual gaming (Candy Crush, Ludo) and esports (PUBG, Call of Duty). Within the real-money games genre, the sub-classifications include daily fantasy sports and quizzing, where either you play free games or matches with stakes involved.

Casual gaming and esports may not involve cash transactions but many popular games in the category have championships with prize money running into several lakhs of rupees.

There are platforms that cater exclusively to a single segment, such as Dream 11 (fantasy sports), while others such as Paytm First Games cover all genres of online gaming.

“Over the last three quarters, we have grown to over 80 million registered users and more than 20 million monthly active users (MAU). With the launch of IPL, we are expecting to reach the milestone of 100 million registered users and 40 million MAUs in the next two months,” says Gupta of Paytm First Games.

With an average user base in the age group of 18-45 years, the platform is seeing active participation from smaller cities and towns. It also helps that most games are free though some require a participation fee.

“Jaipur tops in terms of overall traffic contribution, followed by Lucknow and Patna. In fact, Ludhiana, Panipat, Kanpur, Meerut, Bhubaneswar, Bardhaman and Siliguri feature in our top 25 traffic contributing cities,” Gupta adds.

According to Anirudh Pandita, founder, Pocket Aces, which runs Loco (a live game streaming and e-sports app), regional markets are the next big potential user base. “South India, particularly, has been growing steadily. Streamer sign-ups on Loco are from across the country — especially Tier II, Tier III towns, and even villages — which shows us the audience interest for online games,” Pandita says.

The growth in smaller towns is not surprising as regional language interfaces are now available.

WinZO, which started out in 2016 as a trivia app, is now a full-blown social gaming platform with over 70 games in 12 languages across different formats. The start-up’s registered user base today stands at 25 million.

“WinZO is the market leader in the Tier II-V cities and towns of India because we crafted a perfect fusion of social gaming in one’s own language backed by micro-transactions. It is a proven fact that people prefer to consume content in their own language of choice,” says Paavan Nanda, co-founder, WinZO Games.

Online sports community platforms such as Rooter are the next big thing. These are platforms where fans can join different sports communities, stream their choice of games, upload content and so on.

“A community-driven commerce model is proven all over the world, particularly in the content streaming category,” says Piyush Kumar, CEO and founder, Rooter.

Since the start of the IPL last month, Rooter — which offers content in 10 regional languages — has added close to 75,000 users daily. “There is a 50 per cent increase in our daily new app downloads. A user spends close to 21 minutes daily with us,” he says.

Gaming companies such as 9Stacks are promoting “responsible” playing. “We are the first poker website in the country to roll out a set of features for responsible gaming in which our players can set their own limits on how much they deposit, what stakes they play, what kind of tournaments they can participate in,” says Sudhir Kamath, CEO and co-founder, 9Stacks.

Professional push

Nikita Luther, poker champ, has been signed on as a professional player for Spartan Poker

 

Nikita Luther had never played a card game growing up. Her first time was while in college, in 2009, on an online app on Facebook. Soon the idea of beating her friends drew her to poker. Luther got hooked to the game as it helped her put her “mathematical and analytical skills to best use”.

“It wasn’t easy to convince my father that this wasn’t gambling but a mind game, just like chess. It applies skill — you have to study your opponent and then make your moves,” says the 29-year-old Delhi resident.

She worked a few years in a professional poker company to prove her point. She also participated in numerous national and international championships, winning several titles on the way. “Finally my father was convinced this could be a career. So I quit my job to focus on poker,” Luther says.

In 2018, Luther created history by becoming the first female player from India to win a gold bracelet at The World Series of Poker in Las Vegas. As poker players put it, it is seen as the Olympic gold medal of the game.

Luther has now been signed on as a Team Pro — member of a team of professional players — for Spartan Poker, a digital gaming platform in the country.

“For a professional, depending on the stakes you play you can earn between ₹30,000 and ₹30 lakh a month,” Luther says.

The gaming aspirations are taking a professional turn. And gaming platforms can’t be happier.

“We charge an average of three to five per cent service fees for every hand played on cash tables and an average of eight to 10 per cent service fees from the tournaments played by participants. This is our elementary source of revenue generation,” says Varun Mahna, CEO and founder, PokerDangal, an online poker playing platform.

Investments, too, are spiking. “We have set aside ₹300 crore for investing in the market this financial year. Over the next six months, we will feature over 200 live events on our platform,” says Gupta of Paytm First Games.

Luther’s journey indicates how the industry has progressed in India for professionals. Meanwhile, Puri has just won a few thousand rupees from his fantasy team. It will soon be funnelled into a poker table, waiting somewhere on one of the six gaming apps on his smartphone.

(*Name changed on request)

Smitha Verma is a Delhi-based independent journalist

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Published on October 08, 2020
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