Cryptocurrencies and the realm of online gaming have formed a symbiotic relationship, constituting two of the swiftest expanding subdivisions within the technological domain. However, in India, the utilization of cryptocurrencies for transactions remains prohibited. On a global scale, online gaming has become a colossal $10-20 billion industry. It is on the cusp of making substantial economic inroads into nearly every other household. Nonetheless, the ongoing financial disruptions have rendered the Indian gaming sector unable to incorporate cryptocurrencies as a feasible payment avenue.
What is Online Gaming?
Online gaming entails engaging in video games while connected to the internet. Examples of online gaming platforms include Xbox, Nintendo, and PlayStation. This domain has evolved into a significant facet of the media and gaming industry, marked by escalating daily demand. It is one of the globe’s largest markets, encompassing over 200 platforms and boasting over 130 million players.
Is India Dominating the Landscape of Online Gaming?
India has navigated pivotal junctures in online gaming with finesse, experiencing exponential growth since the 4G data revolution 2016. While gaming has long been a part of the Indian economy, the pandemic catalyzed the monetization of the gaming sector. Online gaming stands as one of the most rapidly evolving sectors within India’s Media and Entertainment Industry. Its remarkable trajectory has piqued the interest of corporations and startup investors, paving the way for substantial opportunities and leading prominent business entities to venture into this domain. The concept of pay-to-play has propelled the sector into a billion-dollar industry on a global scale. Over 25 million Indians have linked payment modes to their gaming activities. Consequently, India proudly sits atop the throne of online gaming and is poised to maintain this stature.
“The Indian online gaming sector is now a serious business, attracting growing interest from investors daily.”
Magnitude of the Online Gaming Market in India
Projections suggest that the Indian online gaming industry will ascend to a $5 billion valuation by 2025, ascending from $2.8 billion in 2022. From 2017 to 2020, the country’s Compound Annual Growth Rate (CAGR) for the gaming industry surged to 38%, surpassing China’s 8% and the USA’s 10%. The count of gamers in India is anticipated to reach 500 million by 2025. Over the past two years, India has witnessed the most rapid proliferation of New Paying Users (NPUs) worldwide, escalating from 40% in 2020 to 50% in 2021. Transaction-based gaming revenues in India soared by 26%, with the number of paying players increasing by 17%—climbing from 80 million to 95 million in 2021.
Factors Influencing the Indian Gaming Sector
The surge in the Indian gaming sector can be attributed to various factors. Primarily, the pandemic curtailed recreational options for Generation Z, thereby expanding the horizons of digital financial infrastructure and high-quality games. Secondly, screen time experienced a staggering surge, with post-lockdown weekly online gaming hours elevating from 2.5 to 4.1. Overall screen time they were escalated by approximately 15% since March 2020. Moreover, metrics such as game downloads, conversion from Daily Active Users (DAUs) to paying users, and in-app purchases have all established a new normal, operating at rates surpassing those before lockdown.
Role of Psychology and Digitalization in the Gaming
Boom Global tragedies contributed to the upswing in online gaming across India and the world. Research indicates that 45% of Indian smartphone users embraced online gaming. Factors like virtual interactions, digital currency, and seamless monetary transactions played pivotal roles in catalyzing the rise of the gaming sector. Gaming emerged as an escape from conventional entertainment avenues like television or print, resulting in a paradigm shift within the Media and Entertainment sector. The demand for digital leisure with peers and family surged, impressing the gaming industry. Influencers further fueled this trend by showcasing how they engaged in leisure activities and monetized their time through play.
The Future Intersection of Online Gaming and Cryptocurrency
Experts from cryptocurrency and gaming sectors envision revolutionary possibilities in integrating cryptocurrencies into online gaming, particularly within transactions-based gaming. This integration may already be underway among international players. As various industries deliberate over Web 3.0 and the Metaverse, the entertainment sector has surged, incorporating high-definition displays, facial recognition, cutting-edge graphics, voice identification, and gesture control techniques. Virtual Reality (VR) and Augmented Reality (AR) transcend boundaries to deliver captivating experiences in real and virtual realms. Numerous cryptocurrency investors possess virtual assets, and gamers are poised to explore profit potential through Non-Fungible Tokens (NFTs). Further, NFT games could seize this opportunity and cultivate novel revenue streams.
However, overlooking legal considerations, the practical obstacle faced by the Indian crypto ecosystem hampers widescale adoption in online gaming or any other transactional domain. Cryptocurrencies in India are predominantly utilize for trading, resembling equities, rather than as a mode of payment. While stablecoins exhibit lower volatility than popular cryptocurrencies like Bitcoin and Ethereum, their adoption in India remains pending. Concurrently, Bitcoin is gradually finding acceptance as a means of payment globally, with many Western companies embracing stablecoins for gaming and other transactions.
Conclusion
As India ascends towards the zenith of its maturity curve in online gaming, corporations and governments will formulate strategies and policies to foster its growth. The gaming sector will soon emerge as a pivotal driving force within the Indian economy. This industry’s reach extends across all segments of society, irrespective of gender, skill level, or location. Games are progressively mirroring this heightened diversity and acceptance. Nations like India, China, and Japan wield substantial influence within the global gaming arena.