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The Dark Horses of the Start-up Era (A Series): 5 - Gaming
The Dark Horses of the Start-up Era (A Series): 5 - Gaming

June 16, 2021

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The Dark Horses of the Start-up Era: A Series

 5. Gaming

Needless to say, when the first lockdown happened in India in March 2020, the 2nd most time-consuming hobby developed by people was “GAMING”, the first one was obviously cooking. India’s madness for gaming is not new and the love for games like Candy Crush, Temple Run, Subway Surfer, Angry Birds, etc. confirms the same followed by the unmatched “PubG”. But then an infection point came and this madness turned into a huge business opportunity. Indian mobile gaming market size which currently stands at $1.2 billion in 2020 is expected to reach $1.6 billion by 2025 and is growing at a y-o-y growth of ~30%. The CAGR for the Indian mobile gaming market is expected to be over 40% post-2020.

After the pandemic, lifestyle changed suddenly, and “gaming” which was never a routine earlier started ruling the downloading charts. Ludo King developed by an Indian start-up saw over 10 million downloads in Sept 2020 making it the most downloaded gaming app in India.

When you see such a love for gaming then game developers also have a tough task to do. We have an old player who is developing a game for us for the past 20 years naming Nazara Technologies which recently got listed successfully on the Indian stock exchange. Nazara’s long legacy became real after the pandemic only.

Now the turning point, it’s not just all about an interesting game but the love for a game. India entrepreneurs capitalized on the love people have for a game called “Cricket”. And then the actual boom came called “esports” which became a category in itself. Esports pool kept on advancing and more sports were added in it like Football, Tennis, Kabaddi, WWE, etc. And it's not just the love for the game but also the knowledge of the game which ended up creating cricket league start-ups like Dream 11 and Mobile Premier League which now together have a valuation of over $2 billion. Even Nazara’s Sports Keeda fall in this league.

As per an analytics company, In-app purchases grew by over 50% and 30% on Google play store and Apple app store respectively. These statistics silent all critics who use to doubt the monetization capability of the gaming business. Gamers have seen a multifold jump (10X from 2010 -2019) over the past years and this trend is expected to continue for a long.

 

Gaming

 

If we talk about the funding, gaming has seen an upward trend since March 2021 (after lockdown). Venture capitalists have invested ~ $350 mn in 2020 which was nearly 6X compared to 2019. Dream 11, India’s only gaming unicorn whose valuation has been rising constantly is seeing large funding infusion. Mobile Premier League (MPL) is about to turn unicorn anytime soon. WinZo, Paytm First among others which got the pandemic boost.

How new game formats have evolved over the year:-

  • Strategic Games (If you win you will get money) like Rummy circle etc.
  • Team Section Games (Invest and Earn) – Leagues and Championships like Dream 11, MPL, etc.

Now, one of the uniqueness in the sector which is clearly not visible in many other sectors is corporate participation. Exactly, it’s so difficult to imagine why large corporates want to invest in gaming companies. But that’s the truth. Flipkart recently acquired gaming start-up Mech Mocha for Flipkart Gamezone. Rakesh Jhunjhunwala backing Nazara Tech followed by its successful stock market listing also attracting a lot of corporates in this business. Reliance Jio leading Series A funding round of a gaming company Krikey.

So, overall this sector has everything set in place to see substantial growth. If not exponential this sector definitely deserves multifold growth in the future.

 

For other blogs in this series, click on the link below:

#1 Social Commerce: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-1-social-commerce

#2 Spacetech: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-2-spacetech

#3 PropTech: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-3-proptech

#4 B2B Marketplace: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-4-b2b-marketplace

 


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