India Online Casual Gaming Segment Expected to Grow at a CAGR of 29%
Online gambling is a sector that has benefited enormously in post-pandemic India. With limited mobility and fewer entertainment options, consumers have come to the game like never before. Girish Menon, Partner and Head (Media & Entertainment) at KPMG India, takes a look at what makes this industry work, as well as key takeaways for marketers.
The online gaming segment has grown at a rapid pace over the past three or four years to varying degrees across the world and now competes with traditional forms of entertainment for consumer attention. Even though the lockdowns induced by Covid-19 have negatively impacted the economy and traditional segments of the M&E industry, online gambling is one of the unique sectors that has taken a step ahead in terms of consumption and monetization.
India’s history has been particularly remarkable in terms of the overall growth shown by the segment. According to a recent report launched by the consultancy firm KPMG to gain a better understanding of the booming casual gaming market in India, the overall online casual gaming sub-segment in India was worth INR 60 billion over the past year. ‘year 21 and is expected to grow at a CAGR of 29.% on FY21-25 to reach a size of INR 169bn.
What’s in store?
According to KPMG’s findings, India recorded the highest number of game downloads in the casual mobile games sub-segment in the world (excluding China) in 2020, with 7.3 billion downloads in the first and third quarters, representing 17% of global mobile game downloads. This is a huge market basket for a relatively new segment.
In addition, monthly active users for the top 100 mobile games and time spent playing online games are 10-15% higher after the 2020 lockdown, indicating the establishment of a new standard where gaming is rapidly becoming. an accepted form of entertainment.
Understanding the gaming market in India
Cut: According to the report’s findings, the casual online gaming sub-segment is the largest part of the overall gaming segment and is valued at INR 60 billion in FY21, accounting for around 44% of revenue totals of online games.
Main growth drivers: The gaming industry has flourished thanks to a number of favorable factors: increasing penetration of smartphones and the internet, an increase in the supply of world-class titles, games with localized content and new features such as the multiplayer and social elements. These all catalyzed the growth of gaming in India and made it a mainstream entertainment option.
Of course, the main driver was the lockdowns induced by Covid-19 which served as a tipping point to unleash the power of casual online gaming.
Here are three trends that may define the future of gaming in India:
Cloud gaming will make it more accessible: With the launch of 5G services becoming an imminent event, it could also lead to far-reaching changes for the gaming segment. Cloud gaming could be the way forward and help transform the gaming experience for users by removing the capabilities of the device. This factor could be extremely critical for markets like India, which have limited capacity to invest in hardware.
AI will make it smarter: AI is increasingly used in game development (using AI-generated storylines), player engagement, interactive in-game experiences, and personalization of each player’s journey with games. It would make the gaming experience much more sophisticated and seamless.
Esports will help monetize it: Over the next five years, the eSports segment is expected to grow rapidly due to increased interest from brands in sponsorship, publishers to promote games and the entry of new players into the value chain, organizers to participating teams. According to the report, the Indian esports sub-segment is expected to grow 27% CAGR in FY 21-25 to a size of INR 5.7 billion.
How can brand marketers make the most of the gaming craze?
Even though free-to-play games (with IAP) remain the dominant consumer basket in India, developers and publishers are desperately trying to think of out-of-the-box monetization solutions to reduce reliance on advertising for monetization. This situation, unique to India, is likely to endure and define market growth in the short to medium term, according to market experts. As the game grows, brands have started to view casual online games as a potential media vehicle to reach their target audiences.
Here are some key trends that could be useful in the marketing suite:
Optimize user engagement: With user engagement growing rapidly, casual online games are becoming a source of mainstream entertainment and garnering a significant portion of entertainment time in a day. With increasing penetration of demographics, marketers are likely to view casual gaming as a viable way to reach target audience, which will lead to significant growth in ad revenue. Various ad engines and mediation networks also focus on game inventory as an important way to place digital ads.
Develop strategies around award-winning ads: Award-winning ads will likely be the dominant category in terms of ad formats for years to come. Given the Indians’ penchant for free-to-play games, the award-winning ads help gamers move up the gameplay by enticing them, and at the same time help publishers monetize engagement. Award-winning ads are a category that, according to various surveys conducted by ad networks, gamers are not afraid to consume as long as it helps them enjoy the game. With an incentive at the end of the ad, award-winning ads guarantee a constant attention of the player on messaging – a win-win situation.
Make video ads more effective: Video ads, especially on the rewards side, are expected to experience tremendous growth when it comes to fill rates and CPMs. The strong call-to-action around video ads and their ability to engage audiences will be important drivers leading to their strong growth.