New Delhi: Online real-money gaming (RMG) is set for a massive decline in India after the government changed GST norms and decided to tax the industry at 28% on the full face value of user collections, a report by gaming venture capital firm Lumikai said on Thursday even as it forecasted that the industry will grow at a CAGR of 20% between FY23 and FY28 to hit revenues of $7.5 billion.
The report, prepared in collaboration with Google, says that while the real-money gaming category will stay muted, much of the growth will come from in-app purchases and ad revenues.
“RMG revenue grew by 33% in FY23. However, given the recent taxation policies, we expect RMG growth to slow down on account of heavy tax liabilities and consolidation in the industry,” the report said, while pegging the size of the overall gaming industry in FY23 at $3.3 billion against $2.6 billion in the previous fiscal.
The report said that sustained increase in engagement has contributed to the growth of the Indian gaming industry. “The total number of gamers grew by 12% in FY23. Average time spent per user per week has increased compared to last year, pointing towards a growing propensity to play games. With 15.4 billion downloads, India is among the top countries in the world for total mobile game downloads.”
The report said that gamer population in India stood at 568 million in FY23 against 507 million in FY22 and 450 million in FY21. The average time spend on gaming per week stood at 10-12 hours in FY23 against 9-11 hours in FY22. Currently, the maximum time of 4.7 hours per week is spent of real-money gaming, while casual gaming is around 3 hours. RMG time spent is set to go down now as the category loses its sheen after the change in GST rates.
Giving an outlook, the report says that the India gaming story is evolving, with multiple ecosystem forces supporting growth. “Rapidly improving digital infrastructure and India’s evolving position as a game development hub bode well for the industry. Funding has slowed down, mirroring global activity; but direct investment by strategics such as Mixi, Sony, Krafton point towards a positive outlook.

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