Bengaluru, 09 July 2024: The Foundation for Economic Growth and Welfare (EGROW Foundation), a non-profit, multidisciplinary public policy organization, in collaboration with Primus Partners – India’s leading home-grown consultancy firm – today announced the release of their new research report titled ‘India’s Booming Online Gaming Industry: A Potential Powerhouse’. The report highlights the exponential growth and potential of India’s online gaming sector and its contribution to the AVGC (Animation, Visual Effects, Gaming, and Comic) industry, which is projected to rise 68% by 2026.
The findings of the research reveal that the online gaming industry is rising to become one of the key employment-generating industries in the next few years. The number of employees in the Online Gaming industry has grown at a CAGR of 97.5% from 2018 to 2023 exhibiting a 69.88% CAGR among the male workforce and an impressive 103.15% CAGR among the female workforce. The sustained growth across gender lines indicates the industry’s increasing appeal and its potential to drive further economic opportunities in the Indian labour market.
Dr. Charan Singh, CEO & Founder Director of EGROW Foundation, noted, “The Indian online gaming industry is a significant contributor to our economy and a vital source of employment and innovation. With 455 million gamers in 2023, India boasts the second-largest gaming community globally after China. This thriving industry offers significant opportunities to attract FDI, create employment across various sectors and enhance investment. Additionally, it is expected to stimulate allied industries such as fintech, cloud services, data analytics, and cybersecurity.”
Adding his thoughts, Nilaya Varma, Co-Founder & CEO of Primus Partners, stated: “Overall, the Indian online gaming industry offers a vibrant and promising landscape, full of potential for economic growth and job creation. However, navigating the recent changes in the GST framework will be crucial for online gaming platforms to maintain their growth trajectory.”
During the research, the surveyed companies highlighted several key issues hindering the growth of the online gaming sector. The most prominent was regulatory uncertainty in the sector, exacerbated by delays in establishing Self-Regulatory Bodies under the IT Rules, which is negatively impacting business operations and allowing offshore operators to gain market share. Also, the retrospective taxation measures totaling INR 1.2 lakh crore issued to gaming companies threaten to erode economic value and potentially devastate the industry.
Another persisting concern is the recent amendment imposing a 28% tax on deposits, due to which some firms are seeking a lower tax rate and a return to the earlier valuation method based on gross gaming revenue to foster growth and attract investment. Companies recommend the implementation of amended IT Rules to create a national regulatory framework, a clarification on retrospective taxation, and the notification of the National Policy for Promotion of the Animation, Visual Effects, Gaming, and Comics (AVGC) sector.
Key highlights of the report:
- The online gaming sector’s contribution to the M&E (Media & Entertainment) industry is projected to rise from 3.4% in 2019 to 10.5% in 2024 and 12.6% by 2026.
- The online gaming sector’s contribution to the AVGC (Animation, Visual Effects, Gaming, and Comic) industry is projected to rise from 41% in 2019 to a staggering 68% by 2026.
- Workforce growth in the industry has increased 20-fold from 2018 to 2023, with a remarkable 97.56% CAGR over the same period, underscoring the sector’s vital role in job creation.
- Notably, the female workforce within the industry has surged, with a 103.15% CAGR from 2018 to 2023.
The sector has recorded an astounding 168.06% CAGR from 2018 to 2023 in terms of annual turnover.
Compared to other major gaming nations, the growth rate of India’s online gaming industry in the past six years has been the highest with a CAGR of 30% from 2017 to 2023.
The report captures the immense potential of India’s online gaming sector as a significant driver for economic growth offering employment and innovation opportunities too. However, the government and industry leaders must address regulatory uncertainties and taxation issues to maintain sustained growth. Backed by the right policy framework, India’s online gaming sector will thrive even more, attracting foreign investment and providing many opportunities across various aligned sectors.
