Representative image of smartphone.
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New Delhi: India's gaming market is expected to reach USD 9.2 billion by 2028-29, driven by a rise in advertisement revenue and in-app purchases, venture capital firm Lumikai said in a report on Monday.
The VC firm's 'State of India Interactive Media and Gaming Report' said the Indian gaming market grew by 23 per cent in the financial year 2024 to USD 3.8 billion from USD 3.1 billion in FY23.
"With sustained growth in in-app purchases and ad revenue, the gaming market is expected to cross USD 9.2 billion by FY29, growing at a 20 per cent 5-year compounded annual growth rate," the report said.
According to the report, in-app purchase revenue continues to be the fastest-growing segment with 41 per cent year-on-year growth.
Real money gaming (RMG) platforms after absorbing users' GST cost and on account of a packed live sports season, comprising two world cups and an IPL, have added USD 400 million to their topline, the report estimated.
"Despite growth in topline revenue, taxation challenges in RMG resulted in margin compression and adverse impact on profitability," the report said.
Casual and hypercasual games saw 10 per cent annual growth in the in-app purchases (IAP) revenue, while advertisement revenue remained stable despite global pullbacks on ad spends, it added.
The Indian gaming market added 23 million new gamers to reach 590 million gamers in FY24.
India is now the world's second-largest market by mobile gaming downloads, 3.5 times larger than the US and Brazil, the report said.
"Average weekly time spent on games increased by 30 per cent, from 10 hours to 13 hours," according to the report.
The annual average revenue per paying user (ARPPU) increased by 15 per cent to USD 22 in FY24 over FY23.
"With 25 per cent of users making in-game payments, the number of paying gamers increased to 148 million. Over 60 per cent of RMG paying gamers now also pay for mid-core games, suggesting a high degree of overlap in gamer personas and growing sophistication of gamers," the report said.