Electronic sports or esports, competitive video game tournaments held on online gaming platforms, has taken the world by storm and it is considered one of the promising industries in India. This sector is also expected to grow more in the coming years due to low-cost mobile networks and the introduction of 5G in the country. But now the question is how much it can contribute to India’s economy.
Several experts have claimed that the esports industry will grow faster in the coming years also because of an increasing number of gamers and growing interest in e-tournaments, while 5G will be powering new possibilities in this industry.
For example, the Ericsson Mobility report stated that the combined capabilities of 5G networks and edge compute technologies will enable game streaming services on smartphones with a quality of experience comparable to PC or console, as well as open the door for innovative, immersive mobility-based mobile games. This is also expected to open up gaming to a broader audience, with nearly anyone with a 5G connection able to join the gaming community.
Esports recognition
Recently the Indian government officially recognised esports as a component of multi-sport events. Esports will be overseen by the Ministry of Youth Affairs and Sports’ department of sports. This move is considered to be a game-changer moment for the esports industry in the country, as official recognition will further promote and accelerate the sector’s growth.
According to the official notification, released in late December 2022, the President of India, Droupadi Murmu, amended the regulations governing esports using the authority “conferred by clause (3) of Article 77 of the Constitution” and requested that “e-Sports be included as part of multi-sports events” from the Ministries of Electronics and Information Technology and Sports.
It is understood that this move will also help to promote the local gaming industry and create a more vibrant environment for esports in the country, which is one of the biggest markets in Asia.
Projection says it all
The popularity of esports in India began to increase very recently. As per industry experts, the sudden growth of esports was mostly seen during the Covid lockdowns in 2020 and 2021.
And now, according to EY India’s report: “The industry is expected to grow at 46% CAGR to grow over fourfold from Rs 2.5 billion in 2021 to Rs 11 billion by 2025. The prize pool is expected to reach Rs 1 billion by 2025.”
It was highlighted in the report that the popularity and the growth will be propelled by several factors such as the increase in esports prize money, more games, localisation, regional adaptation and growth of smartphones, laptops as well as broadband infrastructure.
The report says: “Esports will generate a total economic impact of over Rs 100 billion in the next four years through investments, direct industry revenues, in-app purchases and other revenues. Games popularized by esports tournaments will generate about Rs 14 billion in in-app purchases revenues and the industry is also expected to generate over Rs 300 million of ancillary revenue comprising of licensing and merchandising revenue and player salaries revenue by 2025.”
The impact
Kowshik Komandur, Associate Vice-President with OnMobile Global Limited, one of the leading mobile gaming and entertainment companies in the country, told News18 that currently, in terms of revenue, India is placed sixth on the world’s biggest gaming market index, while the sudden outbreak of the Covid-19 pandemic has led to the increasing demand for esports among the millennials.
He also pointed out that between 2017 and 2020, the country’s industry expanded at a CAGR of 38%, compared to 8% in China and 10% in the US. While talking about employment, Komandur stated: “Currently, the sector directly employs about 50,000 people of which 30% of the workforce consists of programmers and developers. This will likely add 1 lakh direct and indirect new jobs in FY23 and grow 2.5x by 2026. Additionally, the sector is expected to attract FDI to the tune of Rs 780 crore by FY23.”
Citing FICCI Report 2022, he mentioned that the gaming market is set to become the fourth largest segment of the Indian M&E sector, driven by innovations across NFTs, the metaverse, and esports. The industry expert also said that the number of professional esports players doubled from 300,000 in 2020 to 600,000 in 2021 and esports revenue in India was worth $33.50 million in 2021 and is further projected to reach $245.21 million by the year 2028, exhibiting a CAGR of 32.5% during the forecast period (2022-2028).
However, according to him, esports becoming the medal sport in the Olympics and Asian games, the latest move by the Indian government, the economic projections, as well as big announcements in the industry such as Krafton’s announcement of Battlegrounds Mobile India Pro Series, with a prize pool of Rs 2 crores, all these are “testimony to the potential of this rapidly growing industry” and it also means that “the esports industry in India is going to witness limitless growth and endless opportunities”.
Meanwhile, Roland Landers, CEO of All India Gaming Federation, also believes that this is one of the rapidly growing sectors in the country and said that “we are extremely bullish about Digital India’s future in esports”.
“With the recent and most welcome move to have the Ministry of Youth Affairs and Sports regulate esports as part of multi-sports events, we believe there is surely a greater impetus towards creating more revenue generation opportunities for esports in India. The framing of rules governing online gaming intermediaries by the IT Ministry will also doubly aid the esports industry in growing responsibly within India,” AIGF’s CEO noted.
Meanwhile, Soham Thacker, CEO & Founder of Gamerji, one of the leading esports tournament platforms, told News18 that with a growing audience and gamer base, esports has the potential to gain large masses with its increasing number of tournaments and broadcasting rights.
“As the industry matures, advertisers and agencies are expected to leverage esports tournament viewership to gain reach and engagement with the audience. India has more than 300M gamers and it has already started to compete for viewership with the likes of cricket, football, and other conventional games. This will attract a lot of investment in the sector while also contributing to the GDP of the country,” he noted.
Furthermore, the industry insider also said that esports and gaming have already been recognised by the government and it is just a matter of time till it becomes a parallel mainstream sport. “The major following for esports comes from the GenZ and the millennials. As this age bracket grows financially, it will directly impact the industry and India’s economy,” he said.
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