Gaming brands are hoping that the government takes note of its potential and creates a regulatory framework that takes care of the concerns of all stakeholders in this growing industry.
Mitesh Gangar , co-founder and director, PlayerzPot , said that the suggested increase in tax from 18 per cent to 28 per cent as GST may disturb the current economy of the industry and slow down its growth momentum by tightening the cash flow. But the industry will adapt quickly to the new taxation system.
He added that this move will include online gaming under the legal framework and thus, attract investments solely because of its credibility at the global level.
1. Online gaming has seen considerable growth. How do you see this trend in the coming years?
The online gaming industry has shown a global uptick in interest during the pandemic. Breaking stereotypes of gaming as an isolating hobby, there were users above the age of 60 years, besides young gamers, who connected beyond the comforts of their home from across the world. No wonder that the Indian gaming industry is projecting a faster growth momentum. According to a report by KPMG, the online gaming sector is expected to rise to 510 million by the end of 2022. In terms of revenue, the market is expected to grow at a compound annual growth rate of 21 per cent over the period of next five years, meaning that it will reach USD 3.84 billion.
Supporting such growth is an unprecedented demand in gaming, especially among Gen Z and millennial players. Most of them are also planning their careers as gamers and entrepreneurs in this industry. Paying heed to this development, the government is also expediting efforts to make Indian online gaming a serious revenue and employment generating sector.
I see the online gaming market growing exponentially in the times ahead, with increasing regional penetration, and adoption of advanced technologies such as NFTs, Blockchains , and 5G internet.
2. How can brands leverage the online gaming industry?
The global online gaming market is set to surpass USD 200 billion USD in revenue by 2023. The pandemic has helped people to explore and realise the opportunities of online gaming. Now, this industry attracts advertisements because of its user base, which has target audiences for various customers in other industries.
We see many renowned brands leveraging gaming as an engagement channel, including live streaming, sponsorships, and product placements.
As gaming has provided a strong means to socialise, the industry has become yet another outlet for influencer marketing to thrive in. Popular gaming influencers with a huge following on their social media channels are actively sought by brands for endorsement or sponsored content. Technological advancement has even enabled platforms to check if the player is viewing the entire ad.
Likewise, platforms can also replay the ads which users seem to watch without stopping. Therefore, the mechanism for nurturing audiences is evolving at a fast pace in this domain.
3. Monetisation of gaming is a promising area. How do you see advertising creating an impact for brands through online gaming in India?
If we compare the current gaming scene with that even a decade before, we’d see that tables have turned drastically. Gamers, who struggled to fit in, have become influencers. They are adding value to the next generation of gamers with their content, and brands are leveraging their huge base of followers to reach their target audiences much more effectively.
Both marketing and advertising play important roles in nurturing a customer base in online gaming. It’s very important to communicate the right message to users and spread awareness about our services, new launches, and other relevant information such as offers, prizes, competitions, etc., through multiple marketing channels.
Besides these touchpoints, brands are also using mobile marketing to delight and retain users in their entire engagement funnel. Using promotions to advertise fantasy and casual games simultaneously in their own apps, brands are utilising mobile marketing to generate revenue and grow user base.
4. Which industry tends to benefit more from the rise of online gaming?
Various industries are exploring investment opportunities with the vast user base of online gaming. I think telecom companies are one of these players benefitting the most. That’s because telecom brands have analysed the potential of this industry during the lockdowns, and have already started investing on a huge scale.
A high-quality network with uninterrupted connectivity is significant for a satisfying gaming experience. Lucrative areas such as cloud gaming pivot upon 5G service providers being able to deliver low-latency and high-bandwidth connections. As telecom companies usher in the era of 5G in India, they will leverage greater smartphone penetration and thus, better accessibility to hi-res online games across devices.
5. How is data protection ensured in the gaming industry?
India still lacks an adequate comprehensive regulation of online gaming and fantasy sports. This situation leaves players and their data vulnerable to cyber frauds, theft and even circumstances where platforms freeze suspicious accounts permanently.
In a regulated environment, all companies must adhere to data protection laws, while rigorous audits should be done for specific requirements. While brands are already detecting abusive and fraudulent behaviour with advanced data analytics, it is also possible to monitor login activities and switch devices.
Therefore, gaming platforms, in association with tech companies and the government, should create a fail-proof solution for safeguarding consumer data and thus, maintaining consumer loyalty.
6. What are the challenges faced by the real-time gaming industry?
One of the major challenges faced by real-time gamers is the availability of high-speed internet and bandwidth. Reduced latency and ping are important to give users a real-time gaming experience. Today, game developers utilise high-end technology, complex AI, and design elements which require premium hardware, software configurations and excellent connectivity. We are hoping that the 5G connectivity will address a lot of such pain points to provide a maximised best gaming experience with the best internet connectivity at present.
7. How do you see the expansion of blockchain gaming in India?
Gamers have upgraded themselves from single-player video games to multiplayer online games. Setting the next stage of entertainment is blockchain gaming, which enables a gamer to play real-time and earn money. Blockchain has already proven to be transparent and reliable in other industries, and will be used extensively to create a win-win situation for developers and gamers.
A high sense of innovation, coupled with application of blockchain technology, will aid developers to envision, design, and develop dynamic game interfaces based on specific interests and preferences of gamers.
8. What are the biggest challenges for the industry?
The Indian gaming industry is in its booming phase since the pandemic. However, fantasy gaming and mobile gaming are mistakenly associated with gambling. That is because of the dearth of rules and regulations that differentiate gambling from ethical online gaming.
Thus, we are still to take significant strides as far as legalisation and governmental recognition of the online gaming sector are concerned. Legalisation would clear a lot of ambiguity and stigma attached to this industry.
Rajan Navani sees India’s true potential in this industry lies in the Bharat narrative, where the growth is coming from beyond tier 1 cities.
Sidharth Kedia, CEO, Nodwin Gaming feels that young people globally and in India increasingly want more interactivity in their entertainment…