Casual and hypercasual games: IAP up 10%, ads steady
47% of users are ad-tolerant to avoid paying for subscriptions with preference for micro-transaction based in-app purchases.
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India’s new media market touched $12.5 Bn in FY24 growing at a CAGR of 16%. Gaming and Video/OTT are the largest segments, contributing over 60% of the market. India is a key producer of global Animation/VFX services, with the industry valued at $1.6B in FY24, as per Lumikai's report on Levelling up: State of India Interactive Media & Gaming Research FY’24.
The report highlighted that Government amplifies support for gaming and AVGC as key sectors for growth. PM Modi has recognized gaming as a sunrise sector in Independence Day speech, urging more “Made in India” original IP. Moreover, frameworks for distinct legislations and taxations for specific sub-verticals of gaming and interactive media are emerging and gaming is becoming mainstream with acceptance across investors, government, policy makers, academia, and media.
IAP revenue driving monetization growth in India’s gaming market
The annual ARPPU increased to $22 in FY24, a 15% increase from FY23. With 25% of users making in-game payments, the number of paying gamers increased to 148 Mn. Over 60% of RMG paying gamers now also pay for midcore games, suggesting a high degree of overlap in gamer personas and growing sophistication of gamers, as per the report.
The Indian gaming market added 23M new gamers to cross 590M gamers in FY24. Currently, India is the world’s second largest market by mobile gaming downloads, 3.5x larger than US and Brazil and the average weekly time spent on games has increased by 30%, from 10 hours to 13 hours.
India’s gaming market exceeded expectations to record $3.8 Bn in FY24 include subscription, IAPs, and ad revenues. India’s gaming market size by revenue in FY24 (in $ Bn). With sustained growth in in-app purchases and ad revenue, the gaming market is expected to cross $9.2 Bn by FY29, growing at a 20% 5-year CAGR. In-app purchase revenue continues to be the fastest growing segment with 41% year-on-year growth. On account of RMG platforms absorbing users’ GST cost and a packed live sports season comprising of two world cups and an IPL, the sector added ~$400M to its topline.
Midcore games propelling IAP revenue growth in India
Revenue from midcore games exceeded expectations clocking 53% year-on-year growth. Casual and hypercasual games saw 10% annual growth in IAP revenue, while ad revenue remained stable despite global pullbacks on ad-spends. Despite growth in topline revenue, taxation challenges in RMG resulted in margin compression and adverse impact on profitability.
IAP revenue driving monetization growth in India’s gaming market
Annual ARPPU increased to $22 in FY24, a 15% increase from FY23. With 25% of users making in-game payments, the number of paying gamers increased to 148 Mn. Over 60% of RMG paying gamers now also pay for midcore games, suggesting a high degree of overlap in gamer personas and growing sophistication of gamers.
Insights from Pan India Survey
44% of gamers are women, up from 41% last year, playing casual mobile games. 66% of gamers come from non-metro cities. 43% of gamers are first-time earners in the age-group of 18-30, exhibiting high propensity to pay for gaming and interactive entertainment
20% increase in time spent on casual games in FY’24. 25% of gamers said they have spent money in games this year, consistent with FY23. 83% of users use UPI or digital wallets to make in-game payments. Top payment motivators of paying gamers include unlocking new content and upgrading in-game items.
20% increase in time spent on casual games in FY’24. 25% of gamers said they have spent money in games this year, consistent with FY23. 83% of users use UPI or digital wallets to make in-game payments. Top payment motivators of paying gamers include unlocking new content and upgrading in-game items.
Users spend 25% more time on interactive social media/streaming platforms compared to passive social platforms. 47% of users are ad-tolerant to avoid paying for subscriptions with preference for micro-transaction based in-app purchases. Time spent on gaming is ~2x compared to time spent on social platforms.
