The year gone by has proved to be an eventful year for entertainment and gaming segment. Even with different regulatory reforms, this is one segment that has simply emerged as a winner. The transition to embrace the digital went smoothly. The biggest reason for this is the internet and budget friendly computing options on the smartphone. The number of users accessing internet in India is expected to cross 500 Mn this year as per the EY report. Along with this there has been a significant growth in digital subscriptions and online games. On the whole, what we are looking at is a 27% growth in the games segment by the year 2020.
The driving factors to the game spurge
Online games have been around for a while now. However, with time the consumption for these games have just increased and not decreased in any way. The main reasons for this is smartphones availability at pocket friendly prices and affordable internet connectivity penetrating to the smallest parts of the country. People no longer have to be dependent on high priced mobiles to play online games or look for a WiFi connection to avoid high data charges.
The other important factor is the mobile wallet penetration that gives access to easy transactions at any time. Even though customers believe in using credit cards, smaller cities and towns prefer e-wallets over cards. Payments are expected to grow over 2x from INR 30 Billion in 2017 to INR 68 Billion by 2020. This growth will be mainly driven by social gaming and real money on mobiles.
Games that are most preferred
With the gaming segment now moving towards mobiles, this segment is seeing the highest number of downloads. In this segment it is the social games like Candy Crush,real money games like online rummy and casual games that see the highest adaptation. When on one hand entertainment packed games like Candy Crush keeps you engaged in a fun and light mode for a while, on the other hand online rummy is a skill based game that pushes your brain buttons and makes players win real money for every game won.
Both these types of games offer quick fun that can be played in the shortest possible time. So, whether it is a coffee break, a traffic jam or some moments to kill, these games come to the rescue. Currently, the size of real money games market segment is over 55% of the overall gaming market. Despite the regulatory changes in the state of Telangana, this segment has continued to see a growth of 25% in 2017 from 2016.
Players are now comfortable spending
Just a few years back, the trend was to play only free games. People avoided spending on online games and even in app purchases. However, revenue models for online games have now changed. Social and casual gaming companies rely on in app purchases or subscription revenues through mobile operator billing.
The most popular model is the freemium model where games can be downloaded for free by built in app purchases. This works in unblocking the game play options and reach higher levels.
Online card games the fastest growing segment
Card games has always been a favorite time passer for the Indians and with the online games, these players can just log in and start playing the game any time they want. There are also many how to play rummy and the like tutorials available for the beginners. The two primary segments for the online card segment is the real money games and the social games. In social gaming space, they play with digital currency that they can replenish with in app purchases. Of course, with real money games, there is big cash prizes to be won.
Who are the players and what’s keeping them there?
The average age of the players is 25 years. It is expected that in the coming years, the access to increased disposable income will bring more players onboard. With 45% of India’s population under 25 years, there is a huge opportunity for growth of the Indian gaming segment.
Among the other factors discussed, localized content is driving this segment to newer heights. Having multi-lingual options helps people understand and accept the game better. Localization of content also attracts global companies. For example, UK based Stride gaming has acquired 51% stake in Passion Gaming, a rummy online gaming company.
What we are clearly looking at here is the penetration of online games to the smaller cities of India, along with cheap internet and mobile adaptation.