India's gaming industry set to double by 2028: PwC report

According to a report by PwC India, the sector’s revenues are expected to grow at a compounded annual growth rate (CAGR) of 14.5 percent between 2023 and 2028, driven by an expanding gamer base in the country.

Presently, India boasts 450 million gamers, a number that is expected to surpass 720 million by 2028, growing at a 10 percent CAGR.

By then, India’s gamer population is projected to exceed that of China.

Despite this optimistic outlook, investor interest in Indian gaming companies appears to be declining. In the first half of 2024, gaming firms secured just $14 million in funding, a sharp drop from the $78 million raised in 2023, $495 million in 2022, and $1.677 billion in 2021.

In 2023, the industry generated Rs 33,000 crore in total revenue, with the RMG segment contributing about half of that figure.

However, moving forward, the sector’s growth is expected to decelerate from 25 percent CAGR to 10 percent CAGR due to the increased impact of the goods and services tax (GST).

Social and casual gaming companies earned Rs 13,800 crore in 2023 and are projected to reach Rs 36,600 crore in revenue over the next five years.

RMG platforms generate revenue from online games where users make deposits, while casual gaming platforms rely on in-app purchases, ads, and subscriptions.

In 2023, the GST Council implemented a 28 percent tax on online gaming, horse racing, and casinos, significantly impacting Indian RMG firms.

The national exchequer has seen a steady rise in collections following this tax. Before the tax hike, companies contributed Rs 7,200 crore in GST between FY2020 and FY2023.

Since the new tax regime, monthly GST collections have surged to Rs 1,100 to Rs 1,300 crore.

The report also highlighted that four out of five funding deals in the sector were at the seed-stage level.

"Building responsible gaming practices and robust player protection policies will be crucial to maintaining trust and ensuring the industry’s sustainable growth," said Manpreet Singh Ahuja, TMT sector leader and chief digital officer, PwC India.