Lumikai, a gaming and interactive media-focused venture fund, has said that the Indian gaming market is projected to hit the $7.5 billion revenue mark by FY28 in its latest report.

Indian gaming industry clocked $3.1 billion in revenue in FY23, registering a 19 per cent growth from $2.6 billion in FY22, as per the report State of India Gaming Report by Lumikai in collaboration with Google.

However, it marks a drop from $8.6 billion projected revenue for FY27 according to the report by the VC firm in November 2022.

Real-money gaming revenue grew by $500 million in FY23 but is expected to face headwinds and industry consolidation in the coming years, the report said.

This comes at a time when the real-money gaming company is reeling under the effects of the 28 per cent GST.

About 140 million gamers in FY23 were paying users. Overall, India had about 568 million gamers in FY23 which accounts for over 50 per cent of all Indian internet users. This number grew by 12 per cent in FY23, according to the report.

In-app purchases up

The report anticipates a robust industry growth rate of 20 per cent CAGR, driven primarily by increasing in-app purchases in casual and mid-core games and growing in-game advertising revenues.

The average time spent on gaming increased by 20 per cent y-o-y to 10-12 hours per gamer per week.

In terms of demographics, about 50 per cent fall within the age bracket of 18-30 years, with a male-to-female ratio of roughly 60:40. About 66 per cent of the gamers were from non-metro cities in FY23, the report said. The report highlights the increase in the number of gamers from non-metro cities from 57 per cent in FY22 to 66 per cent in FY23.

Means to unwind

Most users play games to unwind or socialise with friends, according to the report. Of the surveyed users, 41 per cent mentioned that they’ve graduated from playing casual games to all kinds of games, while 28 per cent showed a proclivity to experiment with new genres.

Over 58 per cent of users said they partake in in-app purchases. Nearly, 62 per cent of users claim that UPI is their preferred mode of payment for games.

“Indian gaming has been on the rise because of rapid digitisation, growth in new gamers and new paid gamers, and increasing diversity of gaming content consumed. Even though funding has slowed down this year, the outlook towards the gaming industry is extremely positive,” said Salone Sehgal, founding general partner at Lumikai.

“We’re particularly excited to see the increasing engagement of gamers from non-metro cities, which demonstrates the massive growth potential and the opportunity in the Indian gaming industry,” Sehgal added.