India’s Gaming Champions: Growth Amidst a Virtual Revolution

India’s Gaming Champions: Growth Amidst a Virtual Revolution

Charanjot Singh has reinvented football for himself. The 20-year-old doesn’t kick a ball on a grassy field but instead competes in football computer games.

Among his notable achievements, Mr. Singh represented India in the Fifa Esports’ Nations Cup 2023, finishing 64th and bagging $10,000.

“I have no idea if I’m good or not, I just enjoy playing,” he comments.

India’s love for online gaming has surged, with 421 million players in the past year, a jump from 300 million in 2019. According to Ernst & Young, revenues from online gaming in India soared to 135bn Indian rupees in 2022, marking a 22% growth from the previous year. This upsurge in gaming and esports owes its momentum to factors like the pandemic, affordable smartphones, and cheap internet. With most gamers using mobile devices, India now boasts over 900 gaming start-ups.

India's Gaming Champions

However, there’s a distinction in this ecosystem. Esports competitions, like the one Mr. Singh participated in, are seen as genuine sports. Such platforms offer prizes funded by sponsorships and viewer payments, different from iGaming platforms where participants pay to enter competitions. Lokesh Suji, director of the Esports Federation of India, emphasizes:

“Esports has been officially recognized as a sport by the government… It will be taxed in the way that it has always been.”

Suji remains optimistic about esports’ future, especially with corporate support for young players.

“The primary objective of 400 million Indian video gamers… is purely entertainment, and not financial gains,” he says.

Taxation and Controversies: Navigating the Gaming Landscape

The booming gaming sector in India experienced a tremor in July when the government introduced a new 28% tax on online gaming. The initial ambiguity around this announcement led to speculations that it might impact all gaming firms in India. However, the government later clarified that the tax will only target “iGaming” platforms, which include online casinos or “real money” games.

Thankfully, esports and casual gaming sectors remain unaffected by this new tax.

“This GST is neither applicable nor will it have any impact on the video gaming industry or the esports industry,” assures Lokesh Suji.

Despite this, iGaming platforms, which had collective revenues three times larger than the esports and casual gaming sectors, are now grappling with the financial implications. Deepak Manepalli, CEO of Open Play, an Indian gaming firm affected by the tax, says:

“The change will render many businesses unviable… Companies will have to rethink… to ensure that player retention and profitability are still achievable in this new normal.”

With regulations varying across Indian states, the gaming industry also contends with inconsistent rules. Anusha Ganapathi, a Chennai-based data analyst and game enthusiast, believes the solution lies in diversification.

Ganapathi remarks, emphasizing the need for more inclusive games, especially since women account for 40% of India’s gamers:

“Creating a game is an art, like making a movie.”

Mourvi Sharma and her team are developing games

Mirroring this sentiment, Mourvi Sharma, co-founder of Indian game developer BigFatPhoenix, is channeling her efforts into creating mindful games for children. Sharma shares, aiming to inspire the younger generation to ponder their decisions in the game and, possibly, in life:

“We create a world with diverse characters, using classic adventure storytelling.”