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There is increasing popularity of indigenous and traditional Indian board games, fueled by nostalgia and cultural affinity. Tier 2 and 3 cities are currently leading the charge, with a surge in online gaming adoption. Enter Zupee – with games like Ludo, it’s aiming to make family games more appealing for the digital age. 

By instilling Ludo with skills and rewards, Zupee has made online real-money gaming an engaging experience for its players. Currently, Zupee now has over 80 million registered users and has emerged as India’s largest skill-based Ludo gaming platform.

Dilsher Malhi, Founder, Zupee discusses Zupee’s focus on skill over chance, the 28 percent tax on online gaming, responsible gaming practices and more. 

Take us through Zupee’s growth journey?

Zupee was founded in 2018 with a vision to revolutionize the skill based online gaming landscape in India. Zupee identified an opportunity in the Real Money Gaming (RMG) industry, which is primarily divided into three segments: Fantasy, Card, and Board games. Despite the dominance of fantasy cricket and card games, there was a noticeable demand for traditional Indian board games among users. 

Recognizing this gap, Zupee seized the opportunity & became the first company to introduce skill-based elements to Ludo, creating a new category of skill based ludo games. This innovative approach paid off as Zupee's flagship game, Ludo Supreme, quickly became one of the most popular games in terms of active users.

By instilling Ludo with skills and rewards, Zupee has made online real-money gaming an engaging experience for its players. Currently, Zupee now has over 80 million registered users and has emerged as India’s largest skill-based Ludo gaming platform.

How is Zupee innovating Ludo with focus on skill over chance?

At Zupee, we place players at the heart of our innovation & growth strategies. Zupee has infused Ludo with skill elements, transforming it into a more strategic and engaging experience, some of the variations are :

In some game formats offered by Zupee, there's no dice involved, adding an intriguing twist.

We've introduced time-based formats combined with point scoring, testing players' motor skills and strategic thinking against opponents.

Another innovative format replaces opponents with obstacles, challenging players to maximize scores by overcoming hurdles.

In Zupee’s Ludo Supreme, all four tokens are open to play from the start, eliminating the need to roll a specific number to begin. 

Zupee's Ludo variations (Ludo Supreme, Ludo Supreme League, Ludo Turbo etc) incorporate features like time limits for strategizing, option to skip moves adding depth to the gameplay & maximizing player’s skill.

How is Zupee promoting responsible gaming practices?

At Zupee, we've taken proactive steps to ensure a safe, fair & enjoyable experience for all players. We provide a wealth of resources and information on our platform to educate players on healthy gaming habits. Our platform includes a Responsible Gaming Module allowing users to set limits on time and money spent on our platform. Furthermore, we have integrated blockchain technology into our gaming platform, this ensures fair & tamper free outcomes and creates a level playing field for all players. 

Our games are RNG (Random Number Generator) certified, offering players reassurance of fair and transparent outcomes. Zupee's games are deliberately designed to be short, typically lasting only 8 to 10 minutes, ensuring players don't get too engrossed in gaming.

Moreover, we prioritize the well-being of our users by enforcing an age restriction—only those 18 and older are allowed on the platform. We cater to a wide range of players with both ‘free-to-play’ and ‘pay-to-play’ options ( with entry fees as low as Rs 1).

Where is the business coming from the most? 

The charm of classic board games like Ludo, combined with the accessibility of mobile gaming, is driving growth across all demographics!
While Tier 2 and 3 cities are currently leading the charge, with a surge in online gaming adoption, we're thrilled to see an upward trend in Tier 1 users as well. This tells us that Ludo's appeal transcends age and location – it's a game families have enjoyed for generations, and Zupee's format makes it perfect for the digital age.

How is Zupee working around the 28% tax on online gaming?

The introduction of the 28% tax on online gaming has undeniably posed challenges to the industry as a whole. At Zupee, we take a responsible and compliant approach to navigating this new taxation landscape while striving to minimize any impact on our operations and our users' experiences, by sharing some of the burden.

Looking ahead, we believe recognizing online gaming as a category can be seen as a positive development. It signifies the government's acknowledgement of the online gaming sector's potential, paving the way for clearer regulations and industry legitimacy.

What market trends and consumer insight have you been noticing? 

Firstly, with the rise of skill gaming & growing demand for mobile gaming, there's a noticeable convergence of skill and entertainment, creating a unique intersection that's resonating with users. 

Additionally, the emergence of gaming as a legitimate profession, with increased interest in the sector as a lucrative career path, contributes to its exponential growth. We're also tapping into the growing adoption of online gaming in tier 2 and 3 cities, ensuring accessibility for all. 

Moreover, it's fantastic to see more women not only enjoying gaming, but also emerging as leaders in the space. We're also integrating AI and cloud gaming technologies to enhance user experiences and stay ahead of the curve.

The increasing popularity of indigenous and traditional Indian board games, fueled by nostalgia and cultural affinity, is also noticeable.
Moreover, with the shift towards online entertainment and gaming, fueled by increased smartphone penetration and affordable internet access, Zupee is well-positioned to meet the evolving needs of our users. 

What’s the area of focus in advertising and marketing for Zupee in 2024?

Zupee’s prioritization of channels is based on the resonance with the target audience. Channels typically include a variety of digital platforms, social media, influencer partnerships, TV advertising, and strategic sponsorships.

At Zupee, our overarching aim is to enhance brand recognition, drive user acquisition, and foster meaningful engagement with the skill based gaming community, while solidifying our position as India’s largest skill-based Ludo gaming platform.

Zupee’s Dilsher Malhi on responsible gaming, Ludo in the digital age and more

Its been a little over six months after the government implemented a 28 percent Goods and Services Tax (GST) on online gaming bets and the industry is grappling with its impact with no hope of recovering from the slump.  Companies are now bracing for a potential revenue drop exceeding 50 percent and some profit making firms have even slipped back into losses. 

"We were on a growth path in 2024 but now are running on losses," said a gaming company founder who did not want to be named. 

“With the new GST regime our monthly tax outlay has increased 4X. With 60 percent- 70 percent 70 of revenue going towards GST, there's barely any margin left for operations. Everyone is absorbing the tax to avoid losing customers so we are following the same route. We were hoping for discussions in March, but it's now delayed until the first GST meeting after the new government formation,” they added.


The 28 percent GST, implemented in October 2023, is levied on the full value of online gaming bets, not the net winnings (the difference between what's wagered and what's won).


Simply put, players are expected to pay a 28 percent GST on the total amount they deposit, which increases the cost of playing. For instance, if a player wagers Rs 100, they'd effectively have Rs 28 less to play with due to GST, on top of any platform fees. This naturally reduces potential winnings.


Adding to the burden, there's also a 30 percent TDS (tax deducted at source) applied to winnings, leaving players with a significantly smaller portion of their wins.


As per Lumikai’s October 2023 report, around 60 percent users have said that new GST and TDS rules would negatively impact how much they play.


To avoid this situation, many online gaming companies are currently absorbing some or all of the GST burden.


This has resulted in closing down of smaller continues and those who continue to operate have implemented massive cost cuts across board.


“Marketing expenses have been slashed by more than half,” another gaming company founder revealed on conditions of anonymity.


“The downsides of these measures will soon start showing. Brands can’t survive without any marketing and advertising costs. On The other hand, offshore companies advertising no GST or TDS are making things worse. We have no resources to counter their marketing blitz,” they added.


Funding has also dried up. 

As per the  Lumikai’s report, funding in the Indian gaming sector is down 75 percent y-o-y in 2023, mirroring the global funding decrease of 79 percent y-o-y.


“There's no capital in the market, and companies can't sustain losses forever, Cost-cutting is rampant, from marketing to office space, even toilet paper and unfortunately the next GST council meeting in June might not bring relief either,” they added.



Reports indicate a significant rise in GST collections from online gaming since October, jumping from Rs 225 crore monthly approximately Rs 1,200 crore. 


This windfall for the government may come at the cost of the industry's survival.  “Several companies might exit the market,” warned another industry representative. 


“New ventures are unlikely, and the sector can't survive with just a handful of players. Offshore companies will be the sole beneficiaries. There's a lack of empathy for the industry, and no assurances of a turnaround. We might have to move on if this continues,” said the chief marketing officer of a multi game platform.

Experts propose a revised GST structure.

"In crafting a balanced policy framework, we must navigate the intricacies of taxation with a keen eye on societal impact. 

For acknowledging the vital role of skill-based games in fostering digital inclusion and education, setting the GST rate at 18 percent  is a fitting choice. The increase to 28 percent (implemented in October 2023) should be applied prospectively, not retrospectively, ensuring fairness and practicality,” said Dr Aruna Sharma, Policy Advisor, Practitioner Development Economist, and Former Secretary to the GoI.


“Also, it's crucial that GST applies solely to platform fees, avoiding imposition on intangible assets that can’t be considered under goods or services, such as money on the table. In fact, iGaming platforms should segregate this money into an escrow account, reserved solely for winner payouts after TDS deductions,” she added.

Furthermore, establishing clear parameters to differentiate skill from chance games is imperative for effective regulation. According to Sharma, the same should be expedited.

“Let’s advocate for policies that mitigate adverse effects and, at the same time, foster innovation and social empowerment,” she said. 



Online gaming industry faces potential 50 percent revenue drop after 6 months of 28 percent GST implementation

The Central Consumer Protection Authority, the regulator under the Consumer Protection Act has issued an advisory on Prohibition of Advertisements and Endorsement of Online Gambling Platforms. The advisory has been issued in the context of proliferation of advertisements promoting anti-national illegal online gambling platforms, which are increasingly been endorsed by sportspersons and actors from the Indian film industry.

Such sites pose significant financial and socio-economic risks for consumers, especially youth and children and the Ministry of Information and Broadcasting (MIB) has previously issued multiple advisories asking television channels, digital news publishers and OTT platforms to refrain from showing advertisements for online gambling sites and surrogate advertisements.

The All India Gaming Federation, the apex Industry body for online gaming has been highlighting this menace since 2018 and has been at the forefront in providing all relevant information to all government bodies and ministries.

Lauding the move to issue the advisory, Roland Landers, CEO, All India Gaming Federation said, “We are grateful to the Government for taking such a decisive step against anti-national illegal offshore gambling websites, which have been advertising in India in the garb of surrogate news and sports websites. AIGF has been highlighting this menace since 2018, and has been constantly taking up these issues with various Central Ministries and also providing evidence of uninterrupted advertising on major Indian OTT, satellite channels, newspapers and as sponsors in multiple Indian sports leagues. We will continue to monitor this and report any infraction to the Government. We hope that unlike earlier the TV networks, OTTs and news publishers will take this advisory seriously and not support these anti-national websites and give them prime-time airspace.”

The advisory noted that gambling is strictly prohibited under Indian law and is illegal in the majority of the country. Despite this, online gambling sites and apps persist in advertising gambling directly, as well as under the guise of gaming. 
Mr. Landers further added, “This will also help is distinguishing legitimate Indian online skill gaming operators, which provide the highest player protection measures and are a form of entertainment against these illegal gambling sites which are the main reason for widespread consumer harm and problems.”


Read More: <a href="https://www.storyboard18.com/how-it-works/online-gaming-surpassed-filmed-entertainment-in-india-touched-rs-220-billion-in-2023-25500.htm">Online gaming surpassed filmed entertainment in India, touched Rs 220 billion in 2023</a>

Central Consumer Protection Authority issues advisory on prohibition of endorsement of online gambling platforms

India's online gaming industry has surged past filmed entertainment to become the fourth largest media and entertainment segment, according to a FICCI-EY report. The market grew 22 percent in 2023 to touch Rs 220 billion, compared to Rs 197 billion for filmed entertainment.

Gaming grew from Rs181 billion in 2022 and is expected to touch Rs269 billion by end of 2024. Filmed entertainment on the other hand grew from Rs172 billion in 2022 and is expected to touch Rs207 billion by the end of 2024. 

The report highlights the growing popularity of online gaming, with over 450 million gamers in India and 100 million playing daily.

“We estimate over 90 million gamers paid to play; real money gaming comprised 83 percent of segment revenues. Impact of a higher GST levy was largely absorbed by larger players, impacting margins, but protecting growth,” said the report. 

Films on the other hand  grew 14 percent to reach Rs197 billion. Over 1,796 films were released in 2023, and theatrical revenues reached an all-time high of Rs120 billion. Number of screens grew 4 percent and fewer films were released directly on digital platforms. 339 Indian films were released overseas.

Moving on to advertising, it grew up 7 percent in 2023. Traditional media advertising was flat, while new media drove the growth in advertising in 2023. New media advertising contributed 52 percent of the total advertising, and 105 percent of the absolute advertising growth in 2023.

Digital media comprised 51 percent of total ad spends, up from 31 percent pre-pandemic, and contributed the highest share of advertising in India.

TV comprised 26 percent of ad revenues, down from 36percent in 2019.

Together, national media [television + new media] contributed 78percent of all advertising spends, while local media [print + OOH + radio + cinema] comprised the balance 22 percent










Online gaming surpassed filmed entertainment in India, touched Rs 220 billion in 2023

Gangadharaiah Parameshwara, Karnataka’s home minister stated that the government would explore every possible way to frame laws which regulated betting and curbed online gambling apps in the state.


He took part in a discussion at the Legislative Assembly and highlighted how cricket betting was ruining families in the state, stated a media report.


Parameshwara added that the state had its commitment in place to protect its youth by discouraging them from betting, gambling or taking drugs. “The state alone cannot ban betting or online gaming as it needs a strong support of the Centre as most of the online games are operated from different parts of the country and world. So, we need a comprehensive policy and it should be initiated from the centre," he said. 


IT-BT Minister Priyank Kharge said that the real money gaming sector is estimated to be an industry worth Rs 1.6 lakh crore in the country and according to the Union government’s projected estimations for 2024-28, TDS alone is pegged at Rs 7,000 crore annually while GST collection is pegged at Rs 74,000 crore.

Read More: <a href="https://www.storyboard18.com/how-it-works/explained-into-real-money-games-this-is-how-28-percent-gst-will-impact-you-10355.htm">Explained: Into real money games? This is how 28 percent GST will impact you</a>

Real money gaming industry estimated at Rs 1.6 lakh crore, says IT-BT Minister Priyank Kharge

In a post-Budget interview with CNBC-TV18, Revenue Secretary Sanjay Malhotra shed light on the remarkable surge in revenues following the implementation of a 28% Goods and Services Tax (GST) on online gaming. The Finance Minister, Nirmala Sitharaman, presented the interim Budget on Thursday, February 1.

Malhotra said since the introduction of the 28% GST on online gaming from October 1, 2023, the government has seen a sixfold increase in revenue.

"The (revenues) are averaging about ₹1,200 crore now, as against ₹200 crore per month that we were getting earlier," Malhotra said, adding, "(This is) only from online gaming platforms — this does not include casinos, etc. So there was a huge potential, which was untapped, and which we have been now able to tap."

When addressing concerns about the retrospective or prospective nature of these changes, Malhotra clarified that the adjustments were prospective. However, he pointed out that even retrospectively, the belief was that online games were liable to pay a 28% tax rate due to their categorisation as actionable claims. While the industry argues against this classification, contending that they should only be liable for an 18% tax rate, the Revenue Secretary emphasizes the government's stance.

"That dispute is in the court, but going forward, there is no issue — all of them are paying 28%, and they are paying 28% on the actual value," he added. 

The GST Council in its meetings in July and August 2023 had decided to clarify the levy of 28% GST on full face value of bets placed on online gaming platforms and horse racing and casinos.

Online gaming, casinos and horse racing were classified as actionable claims, like lottery, betting and gambling, under GST with 28% tax. The amendments to Central GST and Integrated GST were approved by Parliament and were notified by the central government effective October 1.

Budget 2024: Huge potential with 28% GST on online gaming, says Revenue Secretary

Programmatic advertising, known for its wide-ranging customer acquisition benefits, is making waves beyond traditional sectors. Gaming marketers are now embracing programmatic advertising extensively to boost their user base. According to gaming companies, this strategic move not only promises an enhanced gaming experience for users but also establishes programmatic advertising as a pivotal driver for expanding and captivating audiences within the space. 

“We use programmatic ads whenever we are live streaming any of our matches for people where they can watch it on different platforms be it YouTube, Facebook or Instagram, etc,” said Akshat Rathee, co-founder and managing director, at esports and gaming B2B company Nodwin Gaming.

According to Raj Swaminathan, senior director, revenues and new initiatives, Globale Media—a mobile advertising platform—40 percent to 45 percent of buying occurs through programmatic channels, spanning diverse industries such as gaming, BFSI, auto, FMCG, retail (e-commerce) and digital natives.


Allied Market Research reports suggest that by 2030, gaming-related advertising will be worth $17.6 billion globally. A large part of this will be programmatic ads, said domain experts. 


The pros and cons of programmatic advertising


The benefits programmatic advertising offer are real-time targeting and personalisation. These advantages help a marketer or a brand cater relevant ads to gamers which in turn would enhance their gaming experience.


Globale Media’s Swaminathan agreed. “The ads’ targeting capabilities elevate advertising precision by enabling contextual, behavioural, predictive and even location-based targeting,” he said.


This not only enhances the relevance of ads but also maximises their impact.

Additionally, programmatic buying also brings about operational efficiencies by minimising media wastage and granting advertisers control over ad spends through strategic budget limits and bidding.


According to Rohit Agarwal, founder, AlphaZegus, an online-focused marketing firm, programmatic advertising helps in reaching a broader audience with different interests, spending capabilities and behavioural traits.

“This type of advertising will craft individual campaigns, identify individual platforms and further take decisions on the type of platform, ad budget and the demographics the ad would be relevant to,” said Agarwal.


Another key advantage lies in the transparency programmatic advertising offers—the visibility on sources and inventories.


“The ads integration features provide single-console access to all channels, including display, video, audio, connected TV (CTV) and out of home (OOH), streamlining the entire process for advertisers,” said Swaminathan.


Inspite of surface level similarities with cookies, programmatic ads work differently said Rathee. 


“If programmatic advertising was targeted or similar to third-party cookies, why is a charge not levied on cost per click but air cover? The fact is that digital has never been able to beat television when it comes to air cover. Since digital is programmatic in nature, there is a necessity to be specific around it,” he said. 

The other disadvantage of this medium is inefficient downloads.

Even with its benefits, according to Rathee a good program manager always beats programmatic advertising.


How programmatic ads fit in with esports and real-money gaming?


Online gaming can be broken down into two segments. One is esports, which constitutes the likes of BGMI, Valorant and Call of Duty. The other is real-money gaming which includes rummy, poker or fantasy games.



Programmatic advertising helps better in real money gaming (RMG) , said experts. 


In the real-money gaming segment, the audience is massive. It also includes people from the low-income set, and cuts across age brackets. Overall, it has a much more pan-India presence.


“For RMG doing programmatic advertising makes a lot of sense because their audience is massive, they constantly need to keep evolving their media approach and their media strategies. And programmatic advertising lets them do that more quickly and more efficiently,” Agarwal pointed out.


Rathee agreed. According to him, companies with a B2C business model and the real-money gaming sector will find programmatic advertising beneficial because 90 percent of real-money gaming brands are dependent on it.


Types of ad formats


There are three kinds of ad formats which can be run on any digital media programmatically. The first is display advertisements. They are basically banners that don’t remain static. The second is video advertisements which surface while watching videos, especially on YouTube. The third, which India is catching up with, is audio.


The scaling of audio and gaming within the programmatic sphere signifies an evolving and diverse landscape, which underscores the dynamic future of programmatic advertising.


Video ads also turn out to be effective in the gaming ecosystem compared to static ads. 


Measurability


Gamezop’s co-founder Gaurav Agarwal highlighted an example to explain measurability in this space. 


“Let’s say A spent Rs 1 lakh on advertising a scooter on a website or across publishers. An advantage here is that it can be computed how many people clicked on the advertisement or how many visited the website, thus expressing their interest,” he said.


But if the same was put out on a billboard or in a newspaper, some people would stop to read, some people would pass it by and for some, it would just be read and forgotten. Of course, some would express their interest. But the return on investment (ROI) here is tough to measure.



“Hence, in programmatic advertising, it is measurable where one can measure the ROI and see how much money was spent and on a near-accurate basis,” Agarwal added.

By eliminating audience duplication and implementing frequency capping (a feature limiting the number of times video or display ads are shown to the person), programmatic advertising optimises campaign performance. 


Additionally, the integration of various ad formats under a unified platform not only streamlines the buying process but also enhances return on ad spend, said other experts.


The future of programmatic ads in gaming


Overall, gaming marketer feel the need of programmatic advertising in gaming to go beyond performance, and offer performance-based results.


“Looking into the future, the trajectory of programmatic advertising is poised for remarkable advancements. The integration of artificial intelligence and machine learning will refine targeting precision and campaign optimisation. The emphasis on large-scale utilisation of first-party data is expected to play a pivotal role, fostering more personalised and targeted advertising,” Swaminathan said.

Game-Changer: Programmatic advertising takes centre stage for gaming marketers

With gaming emerging as the best medium for advertising and sponsorship, at least as far as sport and live events are concerned, it’s a win-win situation for media houses and gaming companies, says Roland Landers, chief executive officer, All India Gaming Federation (AIGF).


While media houses are able to send different packages to different sets of advertisers based on their requirements and objectives, gaming companies are getting to address and reach the right audience, Landers tells Storyboard18.

 
Storyboard18 also talked to Dhruv Garg, tech & policy lawyer, and legal advisor to AIGF, who says revenue from casual gaming or AAA gaming for games made in India will increase in the coming years. 


Both of them also touched upon the recently formed Game Bureau.


Edited excerpts:


The Madras High Court has overturned the ban on rummy and poker. Along with A23, Games24x7, Games Kraft and Junglee Rummy, AIGF welcomed the judgment. How would this judgment impact the gaming fraternity? 

 
Landers: There have been a series of high court verdicts which said that even if games are played for money, it won’t amount to betting and gambling.

 
In fact, we have seen many states attempting amendments to the law, trying to equate pay-to-play skill gaming with gambling.

 
Now, with the latest verdict, the stakeholders – whether they are investors, gamers, gaming platforms, or networks -- are convinced that they are in the right business.

 
AIGF has been trying to bring online skill gaming, particularly the pay-to-play side of skill gaming, to the Centre’s attention. 

 
Garg: I think the high court has basically said that online games of skill are different from games of chance.


Very recently, Karnataka, Kerala and Tamil Nadu have struck down laws prohibiting online gaming. There are legal challenges in Andhra Pradesh and Telangana on the same issue.


Starting October 1, 28 percent GST was imposed on the real-money gaming industry. How has it impacted the gaming industry so far? How has GST impacted investments, especially from international players?


Landers: When we look at the Indian online gaming ecosystem, it is being self-regulated by AIGF, the apex industry body.

Clarity was sought on two matters. One was on a proper regulatory structure that oversees the self-regulatory process. The second was on taxation, both direct and indirect.

As far as direct taxation is concerned, we were able to work with the tax department and come to a consensus. As far as indirect tax is concerned, there is clarity on the way it needs to be done.

The increase in indirect taxation is going to be much higher. And 18 percent was paid on the gross gaming revenue (GGR). Under the new regime, it is paid on the initial deposit.

The impact is that the tax to the government will be much higher. Now, there is clarity. People who would want to open new businesses know for a fact that this is the way indirect taxation is going to happen, this is the valuation and this is the rate.


This will help them to better prepare their business plans. AIGF has more than 100 members. Some at the lower end of the spectrum have been impacted. Some companies have changed their business models, and have changed their focus areas. 

 
I think, from a high-level perspective, we feel it is a positive as far as clarity is concerned. We are also hopeful that there is going to be a review in probably six months. In the initial period, the investor community was a little confused. Right now, it looks as if the stakeholders have settled down. We are yet to know see the overall impact because it is still early days. 

 
Garg: While the industry would have liked the continuation of 18 percent of GGR, which was a strong push by AIGF, we have to look out for the positives. There is now certainty. Previously, there were three things that were uncertain – TDS, regulation and GST.


The TDS issue was solved early this year. As far as regulation is concerned, the rules that were implemented early this year were super helpful. And eventually, we're moving towards a federal regulation.


The last piece, where investors were a little hesitant, was the whole GST issue. Within the next year or so, there will be a lot more investment coming into the sector again. Investments had dried up in the last year or year and a half.


Recently, AIGF and Neokred Technologies unveiled the Game Bureau to elevate online gaming security. How has the online gaming security scenario been in India? How would the Game Bureau uphold the security concerns of the online gaming industry?


Landers: The industry is self-regulated by the AIGF, through what we call the ‘Skill Games Charter’. The charter is quite comprehensive and covers most aspects of the business from a perspective of player protection and responsible gaming. More or less, it has held the industry so far.


All the stakeholders, mainly the gaming operators, have to adhere to the ‘Skill Games Charter’. It ensures responsible gaming.


We have now further strengthened the cause. One of the areas that was important and that was not fully addressed was to have a system that identified fraudulent gamers. AIGF is acting as a Game Bureau, along with Neokred, which would identify such gamers.


Right now, there is no such system, and frauds who use somebody else's UPI or commit such other frauds escape scot-free.


If I am, let's say debarred from one platform, I would easily go to another and start playing. But this bureau is going to create a comprehensive pool where those people would be identified and then the info would be shared with all gaming companies.

 
Garg: I think bigger companies do substantial amount of work on security and safety. Although smaller companies do that work, they face that crunch when it comes to doing the kind of work that someone like MPL (Mobile Premier League), Zupee or others would be able to do. So I think there was a demand from the industry for the longest time to have a central database.


So this is the first step in that direction that the AIGF has taken with Neokred. We're working on how we can make it very robust while making sure that we have a central database to ensure that concerns like data protection and privacy are addressed.


Could you explain the role of programmatic media buying in online gaming?


Garg: Let's say a match is coming up or there are some shows. You go to the channel either directly or through an agency and you buy certain slots and pay certain money. What is happening with programmatic media buying is there is real-time bidding.


For example, if there's an India-Pakistan match and I see there are a lot of viewers there, the channels for that match may open real-time bidding. So if I have the resources, I can actually bid against someone else and get that spot.


Similarly, there is a lot more targeted advertising. Traditionally, the way we used to do it in most cases was that if it's coming on a particular channel and if I give my ad, that same ad is shown throughout India. But now, what is happening, especially with OTTs and digital platforms is that it has become a lot more granular.


The gaming industry, being one of the biggest advertisers, has been experimenting with this for the past few years. But, it's still early stages. We will see a lot more of this happening in the years to come.


Landers: Gaming has emerged at the forefront of advertising and sponsorship, at least as far as sport and live events are concerned. Media houses are able to send different packages to different sets of advertisers based on their requirements and objectives. For the gaming companies, it works well because they are getting to address and reach the right audience.


The important thing for gaming is the acquisition of customers followed by their retention.


From that perspective, these kinds of programmatic techniques and technology that have come into play are benefiting greatly. And most of the big gaming companies have been using it effectively.


What were the gaming trends you witnessed this year? What are your predictions for 2024?


Landers: From an AIGF perspective, what we are seeing from a very macro level is that there are game developers. We are seeing a lot of innovation in the game development side, which is a good thing.


Some people are continuing to attempt what India lacks right now, which is the creation of a AAA-rated game (As per Wikipedia, it is used to classify video games produced and distributed by a mid-sized or major publisher, which typically have higher development and marketing budgets than other tiers of games.) Now, these games generate revenues, which is equivalent to the India gaming revenue. Attempts are being made and very soon we should have them.


It's a great opportunity for us to develop, and then we can expand it. Within the skill gaming industry, there is a lot of innovation. There are also things happening in Web3 space and the overall entertainment side of things.


I think these are a couple of things that we see. For 2024, the growth trajectory that the industry has shown will continue. In fact we will be collating some numbers for the FICCI Frames report for the industry. Overall, the India revenue, which is currently is about $3.1 billion, will increase.


The number of those adopting gaming as a preferred destination for entertainment, is going to go up. We had envisaged about 500 billion by 2025. I think that should be accomplished.

 

Garg: I think, in 2024-2025, given the increased tax burden on the pay-to-play industry, we will see casual gaming increasing in India. The FICCI report is already showing that. But it is still substantially small, like more than 70 percent of the revenue still comes from the pay-to-play or real money gaming sector.


While we believe it will continue to be substantial and over 50 percent for at least the next decade, we think that revenue from casual gaming or AAA gaming for games made in India will increase in the coming years.

Gaming ideal advertising medium for sports and live events now: Roland Landers, AIGF

By Sumanta Dey


India’s online gaming industry has experienced unprecedented growth in recent years, thanks to a perfect concoction of a large youth population, rising income levels, and the high penetration of smartphones and mobile internet. According to a Google-Lumikai report, there are nearly 500 million online gamers in India, with the sector boasting a market size of $2.5 billion in FY23. 


Within online gaming, the real-money gaming (RMG) segment constitutes 83 percent, and has been the torchbearer for much of the growth seen in the past three years. That is also the segment most impacted by the tax policies imposed in 2023, specifically the levy of 28 percent goods and services tax (GST) on all player deposits—a nearly fourfold jump from the previous regime. 


While a goldilocks external environment has driven much of the sector’s growth in recent years, the industry’s ability to attract and retain top-quality talent has provided the foundation on which rapid innovation could happen. However, the sudden and massive tax increase on the sector has created both direct and indirect roadblocks to skill development in the gaming industry.


An industry focused on minimising the business fallout of a new tax would find it hard to concentrate on sector development, talent programmes, investments or initiatives that benefit the broader industry. The RMG sector’s revenue and profit significantly influence the progress of the casual gaming sector as well, as these funds lead to game development, seed investments and ecosystem development that could drive future innovation.
 

In addition to these challenges, the industry faces ripple effects in other areas as well.

 
Research and development capabilities 


India requires robust R&D capabilities to compete in the rapidly evolving global gaming industry. Despite having the world’s second-largest online gaming userbase, India accounts for a mere 1.1 percent of global online gaming revenue. To compete more effectively on the global stage, a dedicated focus is needed on R&D to develop new gaming technologies, improve user experience and introduce revolutionary gaming concepts.


Talent pool in frontier-tech 


As a nation, India needs to build a large talent pool in frontier-tech areas such as game development, AVGC, Web 3.0, artificial intelligence, machine learning, cybersecurity, data science and cloud computing. The online gaming sector now faces hurdles in investing to build this talent pool, and the limited opportunities may drive skilled resources to seek career opportunities in other sectors or in other global markets. 

 
IP creation, export and progression to large-format games 


Despite the massive user base and explosive growth, online gaming in India is still at a nascent stage. There is a long runway of growth possible if the market and users mature to higher-engagement games. So far, most of the large-game formats played by Indian gamers are based on intellectual property (IP) developed in countries such as the US, China, UK, etc. The indirect consequence of the new GST on RMG companies means fewer funds earmarked for new IP, as studios are compelled to opt for safer, tried-and-tested formats, thus hindering the organic development of new skill sets in the sector.


Decline in investor activity, further impacting growth of the industry


The Indian online gaming industry witnessed significant investments in recent years, totalling approximately $2.75 billion between FY20 and FY24. However, the unfavourable taxation and regulatory environment is dampening investor interest to the point where investors are now preferring to wait for clarity before making new investment commitments. This will impact market expansion pursuits of incumbent gaming companies, besides throttling innovation. 


Since October 1, when the new GST policy kicked in, RMG companies have displayed remarkable tenacity to adapt to the new framework. They have changed business models to bear the tax burden instead of passing it on to users. Several companies have scaled back on growth investments, while others have tried to swiftly improve bottom lines by adopting cost-cutting measures. Still, the short-term outlook for RMG companies continues to be fraught with challenges even if the industry eventually overcomes the present odds in the long term. 

India can indeed become the global gaming hub, with online gaming being a major contributor to our $1 trillion digital economy aspirations. For that to happen, however, it is critical to have a favourable and predictable regulatory and taxation framework, both on the demand as well as the supply side. Yes, we have unparalleled advantages—demographics, digital literacy, internet connectivity. But the real tailwinds that propel the sector to a higher orbit will come from the people who work in the sector, the skill sets they possess and the investments companies make in developing them to world-class standards.


Sumanta Dey is the the senior director, public policy and corporate affairs at Head Digital Works. Views expressed are personal.

Investing in skills and talent crucial for online gaming: Sumanta Dey

By Shivani Bazaz

The central government has submitted its response to the Delhi High Court in the case brought by the Social Organization for Creating Humanity (SOCH). The NGO had challenged the constitutional and legislative validity of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, which aim to regulate online gaming.

In a robust defence of its legislative competence, the government cites the Constitution of India, asserting its authority under Entry 31 of List I (Union List) and Entry 97 (residual powers) to regulate matters of online gaming, which transcends state boundaries and falls within the realm of 'Inter-State trade and commerce'. 

The government's response comes after SOCH contended that these rules exceeded the central government's legislative competence and resulted in regulatory confusion. The case has raised questions about the division of powers between the central and state governments regarding online gaming regulation.

Labeling the plea as a proxy litigation, the government's reply contends that SOCH lacks the necessary legal standing to challenge the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023. The Ministry of Electronics and Information Technology (MeitY) emphasises that the rules were framed after comprehensive stakeholder consultations and that the MeitY had allowed for public commentary on the draft rules, a process in which SOCH did not participate.


The central government also contended that the NGO's claim of outsourcing regulatory responsibilities, clarifying that the formation of self-regulatory bodies (SRBs) is part of a larger framework intended to bolster the safety and integrity of online gaming platforms.

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