The mobile gaming industry looks to a strong 2021 and here’s why | HT Tech

The mobile gaming industry looks to a strong 2021 and here’s why

Expect 2021 to see these processes gathering steam, but the real benefits of this tech will take at least a couple of years to trickle in.

By: HT TECH
| Updated on: Sep 02 2021, 19:08 IST
The adoption of smartphones by the expanding middle class in the country will be a “significant growth driver” for gaming in 2021. 
The adoption of smartphones by the expanding middle class in the country will be a “significant growth driver” for gaming in 2021.  (GamesRadar )
The adoption of smartphones by the expanding middle class in the country will be a “significant growth driver” for gaming in 2021. 
The adoption of smartphones by the expanding middle class in the country will be a “significant growth driver” for gaming in 2021.  (GamesRadar )

India is the world's biggest market for the gaming industry in terms of downloads. And year 2020 was a sort of milestone year for the industry in India, when it grew to a size of 90 billion, up from 62 billion in 2019, an enviable growth of over 45%, according to Statista. One of the major factors responsible for this growth was the Covid-19 pandemic which swept across the world, as well as India, keeping people locked down indoors and connected to their phones, laptops, and tablets for work and entertainment.

Estimates by other large global consulting firms too indicate the huge growth this industry is poised to chart in the coming years. For instance, according to KPMG, India's gaming industry is projected to grow to 118.8 billion by 2023. Besides, Statista says a third of the global population would have experienced mobile games by the end of 2021. App Annie estimates the global size of the industry to have vaulted past the $120-bn mark by the end of this year. Clearly, the potential is huge.

While Covid-19 and the consequent lockdowns have spurred the growth in this industry, some other factors too are contributing to this expansion. It is expected that these factors will continue to provide heft to the industry in 2021 and in the years ahead.

One of these is the expanding use of smartphones in non-Metro cities – read smaller cities and tier 2, 3, and 4 and beyond towns. According to Counterpoint Research, smartphone shipments grew 23 year-on-year to over 38 million units in the first quarter of 2021, the highest ever Q1 shipment figures. Also, Internet users are estimated to have grown from about 700 million in 2020 to 840 million in 2021, according to India Brand Equity Foundation (IBEF). App Annie has put it succinctly when it said that the adoption of smartphones by the expanding middle class in the country will be a “significant growth driver”.

The year 2021 can expect the advancement in technologies to give a boost to the gaming industry. The roll-out of 5G is a case in point. 5G, the next generation of networks, brings with it benefits of reduced latency (transfer of data from Point A to Point B), improved network capacity, greater reliability, and cheap data prices. 5G technology will pave the way for an immersive mobile gaming experience, going forward. It will see Augmented Reality (AR) and Virtual Reality (VR)-based games, cloud gaming, and richer cross-platform multiplayer gaming experiences rule the gaming industry in the future. Over the years, 5G will also make it possible to have streaming gaming stores that can be accessed on-the-go, while the use of cloud will obviate the need to download heavy gaming apps. Expect 2021 to see these processes gathering steam, but the real benefits of this tech will take at least a couple of years to trickle in. Meanwhile, gaming companies could get into a development mode (of games) for the time when this tech will start being widely available for users. Early birds among these gaming companies will surely reap the benefits.

On the lines of business models like Software as a Service (SaaS), and Platform as a Service (PaaS), the gaming industry is expected to gain from the Gaming as a Service (GaaS) model. This model eliminates the need for software updates, providing a seamless experience to devices of all types – average ones to high-end ones. The resultant ease of use will drive growth in 2021 and beyond.

With major sporting events like international cricket matches being washed out, thanks to Covid-19, some gamers have moved to e-sports. Here, users go to a platform to watch their favourite streamers play the game. From a free service model, it has already started taking baby steps towards revenue-generating activities including live gigs. The year 2021 is expected to close with expansion in these activities.

Women gamers and Social gaming are two other factors that will see greater traction in 2021. A Google report of 2020 has said that the percentage of women using the Internet on their smartphones has increased annually from 19% to 45%, of which 95% now play games. That's a large and new growing constituency for the gaming industry. As for Social Gaming, the interest has plummeted to unimaginable levels to the extent that social multiplayer games have started turning into mini social media platforms in themselves. The profile of the people playing these games shows that monetisation is quite easily achievable.

Between 2014 and the first few months of 2020, the gaming industry in India attracted $350 million. And in the period from August 2020 to January 2021, it attracted a whopping $544 million. According to a report by Maple Capital Advisors, this amount is set to double over 2021 till mid-2022. When such serious money is being pumped in to attract the over 400 million estimated gamers in India, 2021 will see increased efforts to monetise the industry's activities and vie for a share of their game-spend.

In-game ads and in-app purchases of merchandise are existing modes of generating revenues for gaming companies. Companies trying out the subscription model are expecting to see traction in 2021. According to the State of Online Gaming Report 2020, 44% of gamers aged 18-45 globally are willing to subscribe to a service. This compares to a 26%, according to InMobi, of players in India who pay to play games (gaming industry revenues are estimated to grow from 13,600 crore in FY21 to 29,000 crore in FY25).

India's online gaming space, which comprises both internationally played games like cricket, hockey, and caroms, as well as many indigenous games, are largely consumed as free content. But with private equity/venture capital money having been pumped in in large amounts, it is evident that it will move to a paid mode. That will provide strength to the gaming companies and seriousness among the community of gamers. The year 2021 will see a lot of movement in this direction.

This article has been written by Pradeep Gupta, Head Of Growth, Data & Marketing, Gameberry Labs

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First Published Date: 02 Sep, 19:08 IST
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