India’s Gaming Market Likely To Reach $9.8 Bn By FY29

India's gaming industry is projected to expand from USD 3.7 billion in FY24 to USD 9.8 billion by FY29, achieving a compound annual growth rate (CAGR) of around 20 per cent, according to a report from consulting firm 1Lattice. This growth is attributed to several factors, including increased smartphone adoption, a young demographic and government initiatives aimed at enhancing India's presence in the global gaming sector. 

According to the report, with over 950 million internet users and 820 million smartphone users, India's gaming base reached 560 million in FY23. Key drivers of this growth include enhanced connectivity, affordable high-quality smartphones and the expansion of digital payments, which have all contributed to the industry's reach. 

The youth population, comprising over 45 per cent of India’s demographic under 29, is actively engaging with gaming, leading to a demand for more immersive experiences. The rise of gaming influencers, particularly during the COVID-19 pandemic, has also drawn new players into the gaming landscape.

The market is seeing growth in mid-core and hardcore games, which require greater time and skill engagement. This segment is expected to grow at a 47 per cent CAGR and could become the dominant category by FY29. In contrast, the Real Money Gaming (RMG) segment is facing slower growth due to regulatory and ethical concerns, although it remains an integral part of the ecosystem. In FY23, Indian users downloaded approximately 9.5 billion gaming apps, accounting for nearly 20 per cent of global downloads. Active users spend an average of 10-12 hours per week gaming, with around 140 million paying gamers expected to increase as engagement and in-app transactions rise.

The Indian government has recognised gaming’s potential through initiatives such as the Animation, Visual Effects, Gaming and Comics (AVGC) Task Force, established in the 2022-23 budget. This Task Force aims to foster talent development and promote international partnerships. In September 2024, the Union Cabinet approved the establishment of the National Centre of Excellence (NCoE) in Mumbai, which is projected to create 500,000 jobs and enhance skills in immersive technologies. 

Government-sponsored events like the World Audio Visual and Entertainment Summit (WAVES) and the National Game Jam aim to foster innovation and engagement in the sector. The recognition of Esports as a legitimate sport also adds credibility to its competitive potential, as evidenced by India’s Dota 2 team winning a bronze medal at the Commonwealth Esports Championships in 2022.

The private sector is actively investing in the gaming industry, with companies such as Nazara Technologies increasing stakes in key players like Paper Boat Apps and Absolute Sports, totalling over Rs 445.5 crore in 2024. Plans to invest USD 150 million in interactive entertainment startups are also underway, aimed at further accelerating sector growth. Initiatives like Sony Interactive Entertainment’s PlayStation India Hero Project provide resources and mentorship to local developers.

The gaming value chain in India encompasses developers, publishers, distribution platforms and users, with each segment playing a crucial role from game concept to user engagement. Currently, there are over 1,400 gaming companies and 15,000 developers in the country, making it one of the most diverse markets in Asia.