The markets are abuzz with all the Indian IPOs, investment and advertisement opportunities. At the same time, another corner of India’s digital economy is making its presence felt with the VC firms coming into play in the Indian gaming sector. The rapid growth of the gaming industry in India can be attributed to the foreign Venture capital (VC) funding that has pushed the ad spends of the sector to another level. According to the latest data provided by Tracxn Technologies, investment in the Indian gaming sector increased 108% to $443.3 million in 2021 (Jan-Dec) as compared to $212.9 million in 2020. The investment is largely from the foreign VC firms.
Rooter, a gaming and esports platform, flagged off 2022 by raising $25 million in a Series A funding round led by Lightbox, March Gaming, and Duane Park Ventures in January. Meanwhile, Turnip, a gaming community platform, raised $12.5 million in funding, co-led by Greenoaks and Elevation Capital. March Gaming and Greenoaks are prominent US-based gaming VCs, with the former making its Indian debut with its investment in Rooter.
Ramsai Panchapakesan, Senior Vice President and National Head – Integrated Media Buying at Zenith, who has recently done a study on the Indian gaming industry, reckons there have been around 45 deals, including Merger & Acquisitions, in the sector in the last two years. “It’s something that has been unheard of in the last 10 or so years, but the rapid growth of digital penetration is seeing gaming and the opportunities it provides so many other media and other industries booming”, he said.
Piyush Kumar, Founder & CEO, Rooter, says, “Currently, the company has 9.3 million MAU and 35 million downloads on Android. The average time spent per week by 81% of Gen Z gamers is 7 hours and 20 minutes. This is a huge user base that can be tapped by companies for advertising and making gaming content. One unique thing about gamers is that they like to spend on new gaming titles, gaming gear and also as gifts to their favorite gamer/streamers.”
When it comes to advertising in gaming, the figures look encouraging. Panchapakesan notes, “The ad spends by the gaming sector were approximately Rs 1270 crore in 2021, up from Rs 800 crore in 2020, meaning the growth rate of ad spends jumped up by more than 50% in one year. And with funds regularly flowing in from foreign coffers, that number looks set to increase. There certainly is an audience for it.”
Citing details of his research, Panchapakesan notes, out of the 700 million internet users, around 98% (approx 690 million) use mobile internet. Out of this, there are around 85%, or 610 million, smartphone users and 65%, or 450 million gamers, whether casual or those into real-money gaming (RMG). The most encouraging number of all, according to him, is the 14.5%, or 100 million paying gamers who make up that number. The numbers just add up and they’re continuing to do so.
Indeed, the companies themselves are investing these new earnings wisely, not least in advertising. Kumar says, “With this new funding the company plans on prudently expanding the marketing budget to further increase our user growth. Rooter has signed up Indian cricketer Yuzvinder Chahal, who streams only on Rooter. In the future, Rooter would like to do more such unique deals. We also plan to take game streaming and video content mainstream. We have content in many regional Indian languages, and with this funding we will further strengthen our presence in those regions.”
Prabhat Kumar, Director, Esports Federation of India (ESFI), concludes, “Investment in esports is on the rise, though Indian gaming companies still struggle to get the sufficient cash inflow which dictates their growth. With VC firms coming into play, the investments will be better streamlined and the esports companies will receive direct support through which they can adapt premium experience and will support them to build their exclusivity India and globally. Once the stage is set, it will surely attract more sponsors/investors to seek partnerships.”
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