National: The EGROW Foundation and Primus Partners collaborated to release a research report titled ‘India’s Booming Online Gaming Industry: A Potential Powerhouse’. This report projects a 68% rise by 2026 in India’s online gaming sector and its contribution to the AVGC industry.
The research findings show a significant rise in the online gaming industry, emerging as a major source of employment. Employee numbers have surged, growing by 97.5% from 2018 to 2023. This growth is notable among both male (69.88% CAGR) and female (103.15% CAGR) workers, indicating the industry’s broadening appeal and potential to drive more economic opportunities in India’s job market.
Dr. Charan Singh, CEO & Founder Director of EGROW Foundation, noted, “The Indian online gaming industry is a significant contributor to our economy and a vital source of employment and innovation. With 455 million gamers in 2023, India boasts the second-largest gaming community globallyafter China. This thriving industry offers significant opportunities to attract FDI, create employment across various sectors and enhance investment. Additionally, it is expected to stimulate allied industries such as fintech, cloud services, data analytics, and cybersecurity.”
Adding his thoughts, Nilaya Varma, Co-Founder & CEOof Primus Partners, stated, “Overall, the Indian online gaming industry offers a vibrant and promising landscape, full of potential for economic growth and job creation. However, navigating the recent changes in the GST framework will be crucial for online gaming platforms to maintain their growth trajectory.”
During the research, surveyed companies identified key issues hindering online gaming growth. Regulatory uncertainties and delays in establishing Self-Regulatory Bodies under IT Rules are primary concerns, impacting business operations and benefiting offshore operators. Retrospective taxation totaling INR 1.2 lakh crore to gaming companies poses a significant threat to the industry’s economic value.
Companies are concerned about the 28% tax on deposits and seek a lower rate to encourage growth by reverting to the gross gaming revenue valuation method. They suggest adopting amended IT Rules for a national regulatory framework, clarifying retrospective taxation, and notifying the National Policy for AVGC sector promotion.
Key highlights of the report:
- The online gaming sector’s contribution to the M&E (Media & Entertainment) industry is projected to rise from 3.4% in 2019 to 10.5% in 2024 and 12.6% by 2026.
- The online gaming sector’s contribution to the AVGC (Animation, Visual Effects, Gaming, and Comic) industry is projected to rise from 41% in 2019 to a staggering 68% by 2026.
- Workforce growth in the industry has increased 20-fold from 2018 to 2023, with a remarkable 97.56% CAGR over the same period, underscoring the sector’s vital role in job creation.
- Notably, the female workforce within the industry has surged, with a 103.15% CAGR from 2018 to 2023.
- The sector has recorded an astounding 168.06% CAGR from 2018 to 2023 in terms of annual turnover.
- Compared to other major gaming nations, the growth rate of India’s online gaming industry in the past six years has been the highest with a CAGR of 30% from 2017 to 2023.
The report highlights India’s online gaming sector as a key driver for economic growth, offering employment, innovation opportunities. To sustain growth, regulatory uncertainties, taxation issues need addressing. With the right policy support, the sector can attract foreign investment and create opportunities in related sectors.
