Decoded: Indian E-sports Sector

According to the FICCI and EY e-sports report of 2021, e-sports is to set to generate over INR300 million worth of revenue by the year 2025 and the games popularized by e-sports tournaments will generate over INR14 billion in in-app purchase revenue by the year 2025

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"Reality is broken. Game designers can fix it" are the words said by Jane McGonigal. Gaming has always been a global phenomenon. The pandemic forced people to be confined within the walls of their homes. Furthermore, the fear of the virus played a huge part in people taking interest in virtual environments that these games provided. The people of India were always drawn towards gaming but due to economic limitations and parental restrictions, gaming could never come to the fore like it did in the rest of the world.

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There have been misconceptions associated with e-sports. People often think gaming and e-sports are the same. However, that could not be further from the truth. Gaming is a social activity and something that an individual would indulge in during his or her leisure time. E-sports, on the other hand is extremely competitive and structured component which is built around a goal which can be to get better or to win a tournament. E-sports tournament follow either a knockout format or a league format. A knockout format represents the survival of the best. However, a league format represents consistency and the person who is able to gather most points by the end of last match day wins the league. The match is played on a stage with thousands of spectators watching as two teams battle against each other to emerge victorious while commentators explain each and every move and the strategic motivation behind those moves.

"Fortunately or unfortunately, most gaming tournaments hosted for India are region-restricted for South Asia or South East Asia - which prevents the competitive players from figuring out the global scene. This is mostly due to latency issues for real-time games, but for turnbased games like Hearthstone, the focus should be on competing against a global field," said Asian Games E-sports Bronze Medalist, Tirth Mehta.

The line between gaming and e-sports have blurred due to the famous gamers getting involved in tournaments. Nowadays, global gaming icons are participating in e-sports tournaments. However, the e-sports sector has been new to the Indian markets and the inception of the market is directly related to the emergence of PlayerUnknown's Battlegrounds. The emergence of the multiplayer battle royale style game marked the advent of tournaments between competing teams with a cash prize to win. The players would not be competing against the games AI, rather opponents who would be in the same building with a different strategy altogether. Another differentiating factor between gaming and e-sports is that there is a controlled environment in which e-sport takes place which reduces the randomness in the game. Being a leader in the mobile gaming industry coupled with cheap data rates, PUBG skyrocketed in popularity in India. U.S. and China have been leaders in the gaming and e-sports category for a long time. However, both of the countries are popular in two different categories. U.S. is a leader in console e-sports, whereas China is a leader in PC e-sports and now gaining momentum in mobile e-sports.

"While e-sports still comes under the wide umbrella of gaming, it has built an expanding ecosystem around it in India. There are multiple stakeholders, professional teams for 5-6 globally popular esports game titles, bootcamps that support these teams and a sea of content creators for each of these games. Then, there are tournament organizers like NODWIN among others who host championships in partnership with global game publishers like Riot Games, Krafton, Activision Blizzard and many more," said Akshat Rathee, co-founder and managing director, NODWIN Gaming.

The growth of e-sports has been unprecedented as Sri- Lanka became the first South Asain country to recognize e-sport as a sport in 2019. China followed soon after as investors have been drawn to the opportunity of growth in the sector that is still relatively new. According to a report by Sequoia and BCG 2021, gaming market in the country with respect to the global gaming market in India was 1 per cent whereas USA and China had 23 per cent and 26 per cent respectively as of 2020. The compounded annual growth rate of the gaming market in India from 2017-20 has been 38 per cent.

"India was always a pretty decent gaming market through the last decade when it was largely, casual or mid-core games, which were doing well in India. Games like PUBG, which is now BGMI, Freefire, Call of Duty helped because these are the games that made gaming a much more community activity rather than something that you play alone. There were tournaments being held. The lockdown in effect meant kids were pursuing the hobby and the parents were supportive," said Piyush Kumar, founder and CEO, Rooter.

Mobile gaming is expected to reach $5 billion-plus by 2025. Better phones and better access to multiplayer games have been the reason for this growth. The COVID-19 pandemic helped accelerate the cause of e-sports. The confinement and restrictions imposed on people led them to turn to virtual environments to explore which ultimately led to the rising popularity of multiplayer games. Multiplayer games withold an advantage of playing the game as a group that led to social interactions at a time when it was the hardest thing to do. There were various tournaments being held at an amateur level during the lockdown.

"Today, we are growing at almost 22-29 per cent compounded annual growth rate and the industry is aimed to cross the $5 billion mark by 2025," said Pranav Panaplia, founder, OpraahFX and OP Gaming.

NODWIN's tie-up with FDSL to bring about the eISL brought e-sports to the spotlight as each club was given two FIFA players. The players represented their clubs and had their own fixtures and leaderboard. E-sports has also boosted employement opportunities in India amidst the pandemic which led to massive layoffs. Game analysts, content creators, content writers, video editors, graphic designers, team coaches and social media managers are some of the prominent professions for e-sports. The e-sports sector is projected to generate over 11,000 jobs in India by the year 2025.

"Mobile game developers have been taking a major chunk of the gaming pie since almost a decade back. With the introduction of many VR and AR mobile gamers, this is surely going to increase in the coming years," said Techno Gamerz in an interaction with Entrepreneur India.

According to the FICCI and EY e-sports report of 2021, e-sports is to set to generate over INR300 million worth of revenue by the year 2025 and the games popularized by e-sports tournaments will generate over INR14 billion in in-app purchase revenue by the year 2025. Subsequently, the Indian e-sports industry revenue is projected to more than quadruple to INR11 billion by 2025. Growing at 46 per cent compounded annual growth rate, the industry is drawing attention from domestic as well as international investors. The report also indicates that there will be massive investments made in the e-sports sector.

"Participation of women in gaming has increased fairly since a few years. While the number is still low when compared to the male counterparts, I am confident that many females are now challenging the status quo and jumping to the gaming bandwagon," said Mansi Gupta (Magsplay) in an interaction with Entrepreneur India.

The streaming ad revenue is also expected to quadruple to INR6.5 billion by 2025. The market is projected to witness around INR34 billion being invested in the sector in the next five years as India takes over as a segment leader. More female participation in the sector has been witnessed all around the world. The female participation in e-sports is set to double in the next two to three years and by 2025, nearly half a million e-sports players will be women. Tournaments and competitions are set to be more lucrative as the Indian prize pool will shoot upwards from 0.61 per cent to 1.92 per cent and is expected to grow at a compounded annual growth rate of 66%. The world has become a spectator as India is en-route to become one of the giants in gaming and e-sports. India has become an arena of competition and with a tech-savy and a relatively young population compared to its western and eastern counterparts, the sector is set to expand at a rapid pace.