Mobile Accounts for 86 Percent of All Gaming Revenue for 2020

A new report by the Indian branches of venture capital company Sequoia and global management consultants BCG (Boston Consulting Group) expects the local mobile gaming sector to grow from $1.5 billion generated in 2020 to $5 billion in revenues by 2025. All gaming revenues for 2020 across mobile, PC and console were $1.8 billion, with mobile accounting for a 86 percent share.

While the Indian gaming sector has been largely driven by the mobile-first phenomenon, gaming in the US is based on consoles with a revenue share of 55-60 per cent, and mobile gaming coming out at a modest 28 percent. Gaming on smartphones in China is estimated at 59 percent, with PC platforms taking the second position with an approximately 40 percent share.

User-Paid Revenue Dominates at 80 Percent with RMG Outperforming IAPs Twice

Revenues paid by users account for $1.2 billion or 80 percent of the $1.5 billion generated by India’s mobile gaming segment in 2020. Two thirds of the user paid total was generated by real money gaming (RMG) including online casino and fantasy sport games, amounting to almost $800 million or 53 percent of the segment’s revenues in 2020.

A little bit more than $400 million, or 27 percent of mobile gaming revenues, came from paid apps and in-app purchases (IAPs) combined, with business-to-business (B2B) payments in the form of ads placement coming at 20 percent of the total, or $300 million.

Prizewinners, Diehards and Socializers are the Biggest Contributors 

The report by Sequoia and BCG differentiates between six types of gamers depending on the ‘why’ and ‘how’ they play. ‘Prizewinners’ who play to earn money, ‘Diehard Gamers’ who “live to play” competitively, and ‘Socializers’ who use gaming to catch-up with friends contribute the most to the Indian mobile gaming sector’s revenues.

‘Prizewinners’ who frequent Pure Win and other casino and card websites or online fantasy sports platforms are the biggest revenue generators with a 40 percent share. They display the highest average spending figures of $10-11 per user and $15-16 per paying user annually, and have the highest ratio of paying users of 68 percent.

The other two high contributing categories have a combined value share of 30 percent, with ‘Diehards’ carrying 14 percent, and ‘Socializers’ bringing 16 percent. The paying users among the two types are 47 and 44 percent respectively, with average spending between $2.5 and $3.5 per user and between $6 and $7.5 per paying user.

The other categories are the ‘Window Shopper’ who plays occasionally and out of boredom, the ‘Time Crusher’ who uses gaming as a filler activity with the aim to pass time, and the ‘Indulger’ who plays games to treat themselves with a reward.

These three types of gamers together account for the remaining 30 percent value share of the market, with a paying user ratio between 22 and 31 percent and average annual spends between $1 and $2 per user and between $5.5 and $6 per paying user.

Indian Gaming has been Growing Fast, but the Desi Market is Still Small

For the four years between 2017 and 2020 inclusive, the Indian online gaming market was growing at an average compound annual growth rate (CAGR) of 38 percent, starting with 37 percent in 2017-2018 and gaining pace to 39 percent in 2019-2020.

The growth in India was significantly higher than the CAGR of the US gaming market which was 10 percent for the 2017-2020 period, and China’s 8 percent for the same timeframe. Still, India holds a mere 1 percent of the global gaming market with its $1.8 billion in revenues, compared to the 23 percent share of the US with an excess of $40 billion in revenues, and China’s share of 26 percent and $45 billion in revenues.

Notably, internet availability in India in 2020 was 46 percent, while 60 percent of China’s population and 89 percent of the US population had access to the internet in the same year. Internet penetration in India is expected to reach 62 percent by 2025 driven by cheap mobile internet offers. #livehyd #hydnews 

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