Rising Smartphone and Mobile Data Penetration and Young Demographics Fuel Growth of Gaming Industry
The Indian online gaming industry has been going through an unprecedented scale of growth in the last few years pushed by the rising accessibility of affordable smartphones, the availability of some of the world’s cheapest mobile data plans, and the country’s demography featuring a majority of young and tech-savvy Indians.
As per data by Statista, the Indian gaming market reached ₹9,000 crore in value during the Financial Year of 2020 and is expected to grow further to ₹14,300 crore by the end of 2022. Estimations of the total revenues generated by the country’s mobile gaming industry provided by Sequoia Capital India and the Boston Consulting Group (BCG) reveal a current market size of $1.5 billion which is projected to grow more than threefold to $5 billion by 2025 propelled by the rising smartphone adoption in mobile-first India.
Rapid Development of New Technologies Adds Fuel to the Fire
The advance of new technologies and innovations sees all-time classic online Andar Bahar and other traditional Indian games be joined by a multitude of new games and whole new gaming genres and modes of playing. The unstopping progress of modern-day science and technology has introduced 3D, Virtual and Augmented Reality (VR/AR), Artificial Intelligence (AI), Machine Learning (ML), and blockchains to gaming, broadening its scope to a whole new universe of gamer entertainment.
Technological improvements have enabled real-life graphics and sounds and a truly immersive gaming experience in 3D, VR or AR mode, while 3D scanning achievements can now create avatars with realistic facial mimics. Blockchain technology and non-fungible tokens (NFTs) have brought a new decentralized play-to-earn mode in gaming providing gamers with a new incentive to explore and play games.
Regulatory Uncertainty Plays a Backward Role
While an ever increasing number of developed economies around the world have found a national regulation over gaming to be the way to control the sector, collect tax revenues, enhance customer protection and lower gaming addictions and problem gambling, gaming in India still has to navigate a sea of regulatory uncertainty. The unpredictability of the legal climate can stall the development of any industry and gaming is no exception.
After several consecutive decisions of the Supreme Court had held that online fantasy sports constitute a game of skill and as such are protected by the Union Constitution, unicorn Dream11 co-founders and owners Harsh Jain and Bhavit Sheth had reason to believe the issue had been clarified enough.
It turned out they were wrong, as a FIR was registered against them on October 8, 2021 for violating the then freshly adopted blanket ban on online gaming in the state of Karnataka, and the duo faced a threat of spending three years in jail and pay a fine of ₹1 lakh.
The Karnataka Police (Amendment) Act of 2021 came into force on October 5 and banned all forms of online gaming, including games of skill when played for a prize, with the only exceptions named being betting on horse races and buying online lottery tickets.
Following the ban, a number of Indian gaming operators, including unicorn Mobile Premier League (MPL) and Paytm First Games, geo-blocked access for residents of Karnataka to their platforms. Dream11 joined the geo-block after the FIR registration to avoid further risks for online fantasy sports users in the state.
The Karnataka gaming ban was struck down by the state’s high court on February 14 as contradictory to the Constitution, and the case against Harsh Jain and Bhavit Sheth was quashed on March 4 by the same court.
Yet, for almost half a year while the unconstitutional ban stayed in force, a number of Indian gaming companies lost a significant chunk of their business, as Karnataka reportedly generates between 7 and 10 percent of the total transactional online skill gaming (TOSG) sector in the country.
Unfortunately, Karnataka was not the only such case, as similar gaming bans stayed in force in the states of Tamil Nadu and Kerala for several months, before being struck down as ultra vires to the Union Constitution by the respective high courts.
Technology and Innovation back up the Growth of Indian Gaming while Lack of Regulations Anchors it Down
