Fantasy Gaming And Betting For E-sports To Have A Good Run
Mahna expects fantasy sports to undergo a lot of changes as the sector grows and continues to expand
The online gaming industry is expected to grow at a compound annual growth rate (CAGR) of 40 per cent to $2.8 billion by 2022, up from $1.1 billion in 2019, according to a recently released Deloitte India report. Largely driven by smartphones, affordable data, and increasing disposable income, the rapid growth is expected to strengthen the sector's share of the total media and entertainment industry by 4−5 per cent.
The findings of the study highlighted that COVID-19 has pushed the growth further as users latched on to online gaming platforms in absence of entertainment options during pandemic-induced lockdowns. The time spent on gaming apps, increased by 21 per cent during the initial national lockdown, with the total customer base crossing 300 million users. While the arrival of vaccines and resumption of economic activities may result in a leveling-off or even decline in the average time spent on video gaming, the industry would already be in a higher gear.
India is one of the top five mobile gaming markets in the world, with a 13 per cent share of global game sessions, and is expected to add 40 million online gamers during 2020−22.
The report said that the business model of gaming platforms has also transitioned. Gaming firms are gradually moving from a model dependent on download volumes and advertisements to one with diversified revenue streams built on consumer engagement and elevated experience levels. In-game revenue streams, such as chargeable expansion packs or virtual coin packs as well as subscriptions, are gradually picking pace.
To be sure, Indian gaming platforms have attracted more than $450 million in the last six years.
In terms of gaming segments, real money gaming (RMG) is expected to grow at a CAGR of 40 per cent from 2020−22. Key trend in this segment includes growing support for games such as poker and rummy (which are likely to be recognized as games of skill and thus legalized) that will lead to greater adoption among new users. E-sports revenue is expected to rise at a CAGR of 36 per cent over the next three years. The findings of the report said that gamers spend more time watching other people play video games than they do watching traditional sports on TV. An Indian gamer spends, on average, 3.6 hours per week in watching e-sport tournaments. Meanwhile, fantasy sports revenue increased nine times in the pre-pandemic years between 2017−18 and 2019−20, reaching INR 16,500 crore.
The report also stated that policy-level employment-related initiatives by the government would ensure any gaps in the talent pool are filled and enable the industry to reach closer to its potential.
This is where the casual gaming app called Dangal Games, comes into play that will have multiple games residing in the app. To drive the next phase of expansion, the company also plans to raise funding from the market in the second quarter of FY22.
Co-founded by Varun Mahna, Varun Puri, Shashwat Jain, Karan Gandhi, and Manan Sobti, Dangal Games had recently raised $1 million in Series A round from an undisclosed strategic investor. The company had raised INR 2.5 crore in the first round of funding from an angel investor in July 2018.
Dangal Games chief executive officer and founder Varun Mahna told Entrepreneur India that there is a huge potential in the Indian fantasy gaming space. He expects the number of fantasy game users to grow from 10 crore to 80 crore in the next two to three years.
"We are coming out with our first product in non-card space which is Fantasy Dangal. We believe that there is huge potential for fantasy sports in India. Everyone knows fantasy sports due to the rise of Dream11 and the kind of funding they have been able to raise. But as a sector, it is still very niche and too young," he said.
"India being a crazy sports-loving country the number of users who play fantasy games is only 10 crore. We expect that number to be 80 crore in the next two to three years. So this is the kind of opportunity that is there in the market and we want to capitalize on this growth story for fantasy and acquire a significant market share and user base in the next 2-3 years. That is the vision with which we are entering the fantasy gaming business."
Mahna expects fantasy sports to undergo a lot of changes as the sector grows and continues to expand. "We have always believed that there is clutter at the bottom and space at the top. Fantasy sports is synonymous with cricket but we have a firm belief that Indians follow all sorts of sports. We have lovers of football, hockey, kabaddi and there is space for these games to now start prospering in India. We want to utilize the current level of love that Indians have for sports and then translate that into a very loyal user base for Fantasy Dangal."
After Fantasy Dangal, the company will be coming up with a new offering called Dangal Games. Dangal Games will house all of the company's gaming IPs in a single app. However, Poker and Rummy Dangal will continue to exist as standalone products. Dangal Games will have 20 games at launch.
"With Dangal Games, we are offering our users a single-stop solution for all their gaming needs. It will be a single app from which users will have access to multiple games and products. From a single user, users can play any game of their choice. Be it poker, rummy, fantasy, or casual games as per their choice," Mahna remarked.
The idea behind Dangal Games is to open the company's product offerings to the entire Indian landscape and ecosystem. "Because for Poker and Rummy you will require certain skillsets to be able to play the game. With fantasy, you need a particular amount of interest in sports and in particular games. With the casual games coming in that would make the entire Indian landscape our potential audience."
The company follows a service fee-based revenue model for all its products. "We charge a small amount of money which is being raised through wagers on poker and rummy and we charge a small entry fee for the various contests and tournaments for fantasy. Dangal Games will also follow a similar model as fantasy. For Poker and Rummy, we charge 3-5 per cent of the amount wagered and for Fantasy Dangal it will be 10-12 per cent of the entry fee on the contest. On Dangal Games, we will have a different service fee for each product. The range will vary from 3 per cent to 18 per cent."
"Dangal Games is one of our business verticals under which we've created a multi gaming platform such that a single user can have access to more than 50 games. The idea is to give the players an entire online gaming ecosystem beyond the real money gaming exposure which facilitates community building, instills a sense of belonging, and imparts a seamless experience to flexibly choose from a set of hypercasual, strategy, and action-oriented games. Our vision is to keep on upgrading our offerings continuously so as to cater to the needs of our users and be a flag-bearer in the Indian online gaming industry," He said while stating his technology offerings and how it will change the future.
He claims that they have grown through the pandemic. With the launch of three new verticals, it has been an upward trajectory accompanied by many positive changes for them.
"We are looking to offer more than 200 games and be an industry leader across all gaming verticals," Mahna further shared.