India’s gaming market is worth $2.6 billion, expected to reach $8.6 billion by 2027: Report

India’s gaming market, which has crossed the half-a-billion mark with 507 million gamers, has reached $2.6 billion, revealed Interactive Media Venture Capital Fund Lumikai in its latest report. According to the report titled ‘State of India Gaming report FY22,’ the domestic gaming industry is expected to almost quadruple to $8.6 billion by 2027.

Justin Shriram Keeling, founding general partner of Lumikai, while sharing his thoughts on the report, said, “India’s gaming industry this year hit major inflection points, registering strong growth across the board. India crossed half a billion gamers in FY22, up from 450 million the year prior.”

“Industry growth is expected to be fueled by a rapidly increasing gamer base, higher conversion to paid users, and increasing sophistication of Indian gamers,” Keeling added.

The report, which the VC fund claims is undertaken across India’s gaming industry, had gathered inputs from a demographic sample of 2,240 respondents, third-party data providers, interviews with industry leaders, and the company’s proprietary insights.

Salone Sehgal, Founding General Partner at Lumikai, said, “The last 28 months have been watershed years in terms of attracting VC investment of over $2.6 billion in the Indian gaming landscape. Sustained capital investment and liquidity outcomes in the form of strategic exits valuing $750M+, multiple unicorns, and a publicly traded company have heightened the interests of entrepreneurs and investors alike. This sustained momentum should further drive entrepreneurial ambition and innovation in the Indian gaming industry.”

As per the report, the Indian gaming industry is estimated to have crossed half a billion gamers in FY22, up from 450 million in the previous year. Out of which 120 million, almost one-fourth, are paying users and approximately $20 revenue per paying user.

In addition to this, India was also the world’s largest consumer of mobile games in FY22 with 15 billion downloads in the year.

In FY22, mid-core games, like BGMI, and Free Fire, were the fastest-growing gaming category and recorded a growth of 32 per cent, grossing combined revenues of around $550 million.

It further revealed that Web3 emerged as an increasingly popular technology in games. Web3 games in India have raised around $400 million in funding between 2019 and 2022.

Among Indians who pay for games, nearly 48 per cent of gamers spend money on mid-core games. In addition to this, 65 per cent of paying gamers claim they have engaged in in-app purchases at least once.

Indian gaming companies are on track to raise $513 million for the calendar year FY22. Gaming sector funding is up 380 per cent from 2019 and up by 23 per cent from 2020.

India-based content is growing in popularity with 80 per cent of gamers showing a proclivity to play games based on Indian intellectual property. The number of female gamers in India was found to be on the rise with a 60:40 Male: female ratio.