The global gaming market has erupted, and India has emerged as one of the leading nations in terms of opportunities and scope of growth of the gaming industry. Game developers, publishers, and marketers are leveraging this phenomenon to come out with unique concepts including eSports, fantasy leagues, multiplayer social gaming, etc. that not only engage audience with experience-based interactions, but also establishing effective advertising platforms for brands. The contribution of the gaming industry to the overall growth of the Media and Entertainment sector has significantly increased year-on-year. Value of the Indian gaming industry was estimated at 43 Bn. INR in 2018 1. The factors contributing to this growth story include favorable demographics, deeper internet penetration, lower price points for connectivity, technology enablement as well as socio-economic influencers.
The growth in popularity of technology enabler such as Augmented and Virtual Reality applications, immersive experiences, consoles and wearables amongst the gaming community, especially the millennials, will play the role of sheet anchor in sustaining this growth story along with other potential drivers such as the 5G rollout in future. Let us take a look at how some of these enablers will guide the future of gaming industry in India.
The emergence of gaming parlors and VR arcades is giving consumers an opportunity to experience AR/VR capabilities. VR headsets are becoming cheaper and more user friendly. Globally, the trends around the cognizance of AR/VR applications are encouraging; according to a report by Nielsen, 64% of the gamers are aware of these technologies and devices2. India should be no different to this story. Immersive experiences, superior user interactions and more entertaining environment will ensure that the AR/VR industry maintains its growth. The advent of Mixed Reality (MR), which leverages both AR and VR technologies to enable a never-seen-before user experience, will also significantly define this space.
Data is an imperative for the gaming industry. Data, today, is easily measurable to draw insights on user behavior, timing, and preferences aligned to their demographics. This enables more targeted and personalized gaming experiences. Data on consumer preferences on sports, characters, formats, models (freemium or premium), ability to pay – including the in-game purchasing trends, etc. will be valuable decision drivers for gaming companies, and advertisers will benefit from deeper understanding of the target audience. Companies that effectively use data and data-driven technologies will play a crucial role in creating newer gaming experiences and successfully monetizing these opportunities.
The gaming industry will leverage the potential of Blockchain technology through applications that could protect and sustain the developer community, especially the smaller developers, with assurance over royalty payments across the value chain, and edifice of platforms where users and developers can collaborate to build better gaming experiences. Blockchain will also enable better security over payments, technology, IP and data amongst other capabilities.
The power and influence of technology has pushed creative imagination to unparalleled levels. Face and voice recognition, console-free experience, wearables, customized characters, personalized gaming environment and/or formats, and smart application of AI, ML capabilities are enabling game developers to provide increasingly engaging and realistic experience. This helps enhance customer loyalty and improve customer retention.
The gaming landscape largely consists of three broad categories:
1) Gaming console
3) Online/Cloud based
One of the notable technology inventions has been the cloud-based gaming model, which brings in network efficiencies, enhances data collection and security. The era of fantasy games and e-sports leagues which rely on the cloud technology has only just begun and it demands further penetration.
Large global players are investing significantly in cloud based gaming platforms to support online gaming. A recent research by Limelight Networks revealed that 59% of the gamers prefer the game to be downloaded3. Most offline games are free in nature and almost 84% of the gamers download a free game with about 72% also downloading periodic updates3.
Given the diversity in the gaming community, both offline and online gaming may successfully co-exist in the near future.
PUBG has been a real revolution in the gaming space. The concept of multiplayer gaming agnostic of geographies has transformed this game into a brand-building platform for international companies. It has become the currency for socializing amongst the youth. Today, brands want to leverage the reach of this game by organizing tournaments with large prize monies. Based on an article by Sensortower, Tencent raked in almost USD 100 million through the mobile application stores in less than 200 days of launching the game across the world, excluding China4. Dedicated social media and WhatsApp groups follow the game and exchange game play experiences on a regular basis; these trends further enhance the engagement with the game. Exemplary gaming models such as PUBG will lead to more interesting propositions in future.
Future of gaming industry in India
The Deloitte Media & Entertainment industry outlook for 2019 suggests newer trends in eSports. The new phenomenon of multiplayer video-game competitions, sometimes involving professional players, is filling arenas and boosting bottom lines for the game publishers and marketers. By 2020, the global eSports market is expected to generate USD 1.5 billion in annual revenues5, primarily from sponsorships and advertising to an estimated global audience of 600 million fans5. Marketers bestowed more than 600 brand sponsorships on eSport titles and events in 2017 alone5. Large-scale media companies are beginning to participate now.
A report by Venturebeat suggests that India is among the top 5 countries in terms of game downloads6. Development companies have also increased multifold in last five years to about 250 such companies6. Digi-Capital’s ‘Games Report Q1 2019’ tracks the investments and finance rounds of all games companies, and reveals that the total amount raised in 2018 came to a record-breaking USD 5.7 billion – more than double the investment in 20177.
We are optimistic that this industry is poised to grow in double digits for at least 4 to 5 years from now. New opportunities and markets will be created across the value chain right from the character owners, developers, game coders, animation/ Vfx experts, technology partners, device and console manufacturers, cloud service providers, gamification professionals, brand associations and gaming federations. The real challenge lies in developing markets and strategies to unlock value within the entire chain based on future trends and customer needs. This industry will also create significant employment opportunities. Gaming will provide opportunities for businesses to connect and maintain a long-term relationship with millennials and zillenials through compelling concepts, easy accessibility and engaging experiences. Pricing strategy, however, will always be critical in a price-sensitive market like India. Certain factors that favor the growth of gaming industry in India are:
By Ahmar Zaman, Guest Writer