Online gaming segment witnesses an ad completion rate of 90%: EY

Ernst & Young's new report also found that the number of gamers in India is expected to reach 53 crore by FY28 at a CAGR of 5%.

A new report by consulting firm Ernst & Young, titled "New frontiers: Navigating the evolving landscape for online gaming in India", observes that the gaming segment in India is witnessing an ad completion of 90%.

This number becomes more relevant for a marketer if they look at the total engagaement that games have in India. With around 42.5 crore gamers in FY23, India boasts the second largest number of online gamers in the world after China, which has around 75 crore gamers.

Online gaming has been one of the fastest growing segments within India’s media and entertainment sector. The report ascertains that mobile gaming dominance in India persists with 94% favoring mobile platforms. The ‘mobile-first’ trend remains a powerful force driving the expansion of India’s gaming market.

Further, the report highlights that the number of online gamers in India is expected to grow at a CAGR of 5% and reach 53.8 crore by FY28. The percentage of paying gamers among the total gamer base is anticipated to increase gradually, reaching 34% by FY28.

The growing industry has expanded to a market size of Rs 16,428 crore in FY23. The report estimates suggest that the market size is poised to grow to Rs 33,243 crore by FY28, showing a 15% CAGR.

However, the venture capital funding for the industry hasn't looked that promising in FY23. The report found out that there was a substantial funding decline from Rs 12,740 crore in FY22 to Rs 835 crore in FY24.

The decline in funding for over 1400 startups in the gaming ecosystem can also be inferred to be a consequence of the various government induced mandates that were introduced during the course of the year. In April, MeitY introducing e IT Gaming Rules and the other more significant development was the introduction of the 28% GST on real money gaming.

In gaming, the RMG sub-segment holds a substantial market share of 82.8% in FY23, contributing to Rs 6,500 crore - Rs 6,800 crore in direct tax revenues and an estimated Rs 75,000 - Rs 76,000 crore in indirect tax revenue (GST) to the exchequer during FY24-28.

"After the new online gaming regulations came into effect in April 2023, the Indian gaming segment has sought to resolve variousquestions surrounding the legal status of different online gamingformats. This marks a crucial step toward providing clarity to the segment, investors, state governments and other enforcement agencies. While the companies are gearing up to reinvent themselves in the online gaming 2.0 era, the endeavor is now to facilitate a smooth and robust execution of these regulations and redressal of implementation hurdles," Raghav Anand, partner and leader-digital, new media and convergence, EY Parthenon.