BW Gaming World
In 2015, India saw the rollout of 4G and along with it, increased penetration of affordable yet powerful smartphones. Internet penetration in India has also been increasing on the back of affordable internet tariffs post the Jio revolution. There were only 200 million mobile internet users in 2016 and this surged steeply to 846 million this year. All this, along with the COVID pandemic, has led to a massive boom in the mobile gaming market. The country holds a lion’s share of global game downloads and clocked 15 billion game downloads in the financial year 2021 making it to the top of the ladder in game downloads. The United States was a distant second with 4.8 billion game downloads. While the downloads are high, India contributes to only 0.2 per cent of the revenues of these games, making it one of the least favourable countries for not only global studios but also for Indian studios to build and publish their games for the Indian market. The US contributes 31.5 per cent of the revenue of global games.
Why fewer paying users?
Given India has a per capita GDP of ~USD 2000 which is significantly lower than other leading economies like the USA (USD 60,000), England (USD 45,000) and China (USD 12,000), Indians are reluctant to spend on expenses which do not fall in the bracket of necessities such as roti (food), kapda (clothing) and makaan (accommodation). Gaming, being a ‘non-essential’ activity, failed to capitalise on the captive monetisation potential of the vast number of Indian users. At WinZO, we conducted an extensive consumer survey to understand Indian gamers’ behaviour. The study suggests that the monetisation issue faced by game developers and
studios can be attributed to the replication of global and conventional game monetisation models in India despite the wide economic and cultural gaps. Globally, the monetization models used for games are in-app purchases, ad-monetisation and subscription-based models. For in-app purchases and subscription-based models, the entry ticket sizes are generally high which deter Indian audiences from spending. Also, the advertising revenue per impression is very low in India as compared with western markets and this makes ad monetisation also a non-sustainable business model. To highlight the extent of the variation in ad revenues, Youtube in 2021 had a CPM (cost per mille or 1000 impressions) rate of INR 53 in India which was INR 2,500 in the USA and INR 1,650 in the UK. Hence, the monetisation opportunity for game developers stands limited.
Greener pastures for gaming studios
WinZO’s study suggests that Indian audiences favour byte-sized transactions that range from INR 1 to 10. In addition, Indians have shown a huge appetite for domestic content. Given that a huge proportion of internet users is now vernacular, there is a major opportunity for Indian gaming studios to capitalise on this need. As per a Lumikai report, 80 per cent of gamers in India show a propensity and preference for culturally resonant gaming content and 69 per cent non-gamers claim they would play an Indian IP-based game. Growing the number of paying gaming users in India would also require more localised targeting. We had to build a network of thousands of micro social media influencers speaking not just in regional languages but also dialects.
With the introduction of these new and more effective models powered by micro-transactions and increased personalisation, monetisation potential in developing markets like India is expected to increase multifold. WinZO, for instance, has 3.5 billion monthly transactions. The number of paying gamers is expected to double to 240 million in the next three years, as per the Lumikai report. The revenues in financial year 2022 hit USD 2.6 billion and is expected to reach USD 8.6 billion in financial year 2027, the study said. India’s percentage of first new time paying users (NPUs) in gaming is the fastest-growing in the world with two million NPUs being added every month. This is going to be enabled by a young population with growing game-ready smartphones and access to affordable data, but more importantly driven by growth in the local developer ecosystem, localised games keeping in mind local preferences and languages, new business models that are making games affordable and an increase in adoption of digital payment with the introduction of UPI and payment wallets.
There are 900 Indian gaming companies in the financial year 2022, up from 500 in the financial year 2021. WinZO has onboarded 70 gaming studios to help them localise their content in 12 languages and increased their revenues by over 100 times. It plans to onboard more gaming studios and help them localise to suit audiences across India.
More access to capital
It is important to note that game development is a risky and expensive endeavour. The chances of a game getting popular are less than 1 per cent. Even the widely renowned studio, Rovio, failed with 51 games before its puzzle video game Angry Birds broke all records. This kind of high-risk environment has posed a detrimental impact on the game studios’ ability to attract capital. This has led to the current situation where a country like India, which is a global supplier of software services, has a virtually non-existent footprint on the global game development landscape.
That’s slowly changing. The recent funding infusion in India from global gaming funds like Griffin Gaming Partners, Makers Fund and Courtside Ventures will give a leg up to Indian gaming companies. To contribute to and provide the much-needed impetus to the growth of the game development ecosystem, WinZO has also set aside a corpus of USD 25 million to back high-potential game developers and studios.
Summing up
All in all, effective game monetization is a balancing act and something that most developers struggle with because they don’t have a plan for targeting the Indian consumer. Too often they’re throwing games at the wall to see what sticks, rather than making a serious investment in targeting Indian consumers. New models of monetisation such as microtransaction and personalised targeting are set to unlock the next level of growth for game developers.
Written by Saumya Singh Rathore, Co-founder, WinZO
