Year Ender 2023: A Mixed Year for the Indian Gaming Industry Presently, the market size was INR 16,428 crore in FY23 and is expected to reach INR 33,243 crore in FY28. Being a rapidly evolving landscape, several trends and events shaped the booming sector in 2023.

By Paromita Gupta

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The gaming segment in India has seen remarkable growth over the years, and the year 2023 will go down as a significant year in the history books. With the second largest population in the world, 433 million of the 846 million internet users are gamers.

Presently, the market size was INR 16,428 crore in FY23 and is expected to reach INR 33,243 crore in FY28. Being a rapidly evolving landscape, several trends and events shaped the booming sector in 2023.

1. Dry Year for Real Money Gaming (RMG)

In July this year, the government decided to impose a tax of 28 per cent on online gaming, horse racing and casinos. In October, the tax was implemented in all Indian states. The decision was met with futile resistance from the real money gaming startups. Over 500+ layoffs occurred across several startups while a few shut down their operations. "This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses and the only people benefitting from this will be anti-national illegal offshore platforms," shared Roland Landers, CEO, The All India Gaming Federation.

2. Win-win for Esports

The year saw a big win for Esports after it was officially recognized as a "multisports event" by the Government of India in December 2022. Esports made its debut at the Asian Games 2022 and the Olympic Esports Week took place in June. The Indian contingency representing at the international level left a big impression. "The announcement of the Esports World Cup is indeed a historic moment for the global Esports community. This tournament will serve as a catalyst for change and growth, both on the global Esports map and in India," shared Lokesh Suji, Director, Esports Federation of India and Vice-President, Asian Esports Federation.

The year also witnessed a transformative influx of brands into the Esports ecosystem, with notable examples such as IQOO SOUL's historic title sponsorship with Team SOUL. Says Animesh Agarwal aka 8Bit Thug, Founder and CEO, 8Bit Creatives and S8UL, "IQOO SOUL's title sponsorship with IQOO highlights the expanding horizons of Esports sponsorships with brands across all domains. The influx of non-endemic brands brings both financial support and broader visibility to gaming creators, organizations, tournaments, and other Esports events."

The amendments made to the Information and Technology (IT) Act by the Indian government also played a pivotal role in distinguishing Esports from real money gaming (RMG). This recognition provided legitimacy to the sector, leading to increased sponsorships and investments.

States such as Madhya Pradesh, Bihar, and Uttar Pradesh launched Esports academies and announced tournaments. Educational institutions also embraced Esports by including it in the curriculum.

Adds Suji, "The future of Esports is exceptionally bright in India. Through the consistent efforts of ESFI, the Indian government officially recognized Esports as a multi-sport event and categorized it under the Ministry of Youth Affairs and Sports in December 2022. Beyond official recognition, infrastructure development is a critical factor for the sustained growth of the Esports industry. The initiatives by our government and numerous states have laid the groundwork for potential financial backing and infrastructure growth in the coming years. Esports now proudly stands alongside the traditional sports of the country, attracting more players and sponsors to the industry."

Also after its temporary hiatus, the triumphant return of Battlegrounds Mobile India (BGMI) this year was an instrumental factor for the Indian Esports industry. Emphasizing the resilience and growth, Rohit Agarwal, Founder & Director, Alpha Zegus noted, "Content solutions have been our top priority in 2023, and it has been an incredible year for us. Titles like BGMI had a comeback that boosted the Esports industry by more than 4x factor, while publishers like RIOT took serious efforts and made massive investments into the Indian gaming space."

3. Still a 'Mobile-first' country

A Lumikai report titled "Leveling up: State of India Gaming FY'23" shared that over 50 per cent of internet users were gamers. "Mobile gaming content has been dominating the digital landscape in India for some time now and it continues to be the largest category. Driven by factors such as young demographic, increased high-speed internet penetration and surge in smartphone usage, mobile gaming is witnessing rising popularity and growth," shared Parth Chadha, CEO and Co-founder, STAN.

India is yet to fully leverage the console and PC segments of gaming. According to Niko Partners, 96.8 per cent of Indians play games on mobile devices.

4. International interest in the market

India is seeing a lot of attention from the overseas investors and developers. Recently, SCARA Gaming announced a partnership with DRUID Creative Gaming, Latin America's biggest gaming agency, to provide Gaming solutions for India. World's largest game publisher Tencent entered the Indian market for a second time with the launch of its game, Undawn.

"The influx of investments by financial investors as well as international game publishers is giving rise to a vibrant ecosystem of gaming companies that are propelling the industry forward at a rapid pace. Additionally, the diversification in game genres is a testament to the evolving preferences of Indian gamers, embracing everything from casual games to shooter and role-playing games," shared Ashwin Suresh, Founder, Loco.

5. Web3 optimism

In July, tech giant Google announced it was updating its Play Store policies to allow the integration of tokenized digital assets like non-fungible tokens (NFTs) into apps and games. Bharat Patel, chairman and director, Yudiz Solutions Ltd shared that this decision could contribute to the 33% CAGR of the NFT gaming market. The market size for Web3 gaming is expected to reach USD 133,228.2 million by 2033.

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 

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