Digital Gaming and Sports Ecosystem
From the rogue waves of Pokémon Go to well-liked Dream 11, India is among the world’s fastest-growing gaming markets today. Gaming in India has undergone a paradigm shift in the last decade but more so in the past two years. New-age technology and its integration into all aspects of the smartphone experience have catapulted mobile gaming into the hypergrowth phase. According to the report titled, 'Building up the e-gaming ecosystem of India and the influence of smartphones’ published by The Internet & Mobile Association of India (IAMAI) and One Plus in September 2021, the gaming industry is currently valued at $ 1.8 billion and is expected to grow to $ 6-7 billion by 2025 with a whopping CAGR of 35-40 per cent.
The 4 major segments of digital gaming and sports namely, casual gaming, fantasy sports, E-sports, and other e-competitions (using real money) collectively contribute to more than 200 million e-gamers playing across more than 200 platforms. The report suggests that out of this, hardcore games are generating more revenue. Hardcore games are complex and multifaceted, detailed games like BMI (earlier PUBG) and Free Fire. The deeper penetration and proliferation of higher quality smartphones into every household and the rise of affordable high-speed internet have transformed the way people spend their leisure time. Today 38 per cent of Indians own a smartphone and can access digital games from the app store. According to the Time Use Survey conducted by the Ministry of Statistics and Planning Implementation (MOSPI) in the year 2019, an individual on average spends 165 minutes a day on culture, leisure, mass media, and sports practice while 143 minutes in socializing and communication (via online and in-person). These figures are undoubtedly expected to revise and rise since 2019 because of the number of hours spent at home by individuals during the lockdown and are clearly visible by a surge in the number of gamers since 2020. The projections made by the IAMAI report seem to be bright for the sector. Fueled by a combination of providence and a massive appetite for data, by 2025 more than 95 per cent of India will be accessing the internet one way or another. The best time for e-sports, online gaming, and e-gaming startups has finally arrived. As gaming attracts capital, the industry is expected to generate 60,000 to 80,000 new jobs. bile gaming has the potential to create value beyond leisure and entertainment. The sector needs a combination of policy, capability building, and thought leadership to drive sustainable growth. India needs to focus on creating a favorable investment environment to nurture the gaming ecosystem. Various indirect initiatives by the government such as Digital India and Digital Literacy are becoming the cornerstones for a booming internet economy. The provision of Software Technology Parks of India (STPI) and the creation of the National Centre of Excellence in Animation, VFX, Gaming & Comics (AVGC) project in IIT Bombay have already laid the foundation for a fertile mobile gaming ecosystem. Going forward, the AVGC sector is expected to have a greater impact on society – fostering creativity at a grassroots level and being a medium to communicate Indian values to the next generation, apart from generating employment for many.
Coming to the next major segment of digital gaming and sports, the Fantasy Sports Industry. Fantasy sports (FS) are digital sports engagement platforms, based entirely on real-life sports matches where users build virtual teams with proxies of real players and real-world statistical performances on one officially sanctioned sports match. FS offers meaningful engagement with sports, competition, skills, and strategy development to gamers. According to a recent report on Fantasy Sports produced in February 2022 by the Federation of Indian Fantasy Sports (FIFS) and Deloitte, India has already become the largest FS market in the world with more than 200 operator companies and 13 crore Indian users surpassing the US market. The Fantasy Sports user base in India grew at a CAGR of 130 per cent between 2016 and 2021. India has also formed two FS unicorns: Dream 11 and MPL; the sector is inspiring more entrepreneurs and attracting investment (and FDI) thus boosting economic growth. Another reason for FS emerging as a key driver of development is due to its association with future-ready skills in fields such as digital, AI/ML, cloud, and analytics that have a multiplier effect on the growth of other ancillary sectors like sport merchandising, digital payments, online sports management coaching and more. The industry size per FIFS is estimated to be around INR 34,600 crore, as of FY21 and is projected to grow to INR 1,65,000 crore. by FY25. The report inferred that apart from the direct revenue creation of INR 5,200 crore. through direct usage of FS platforms, the multiplier would have created an indirect revenue of INR 5,500 crore. through its vendors and service providers. Fantasy Sports: a sunrise sector has served to attract both domestic and global investors; with over INR 10,000 crore investments in the form of FDI, per FIFS estimates, across major platforms. The industry participants expect to pull in another 15,000 crore over the next three years.
Given these developments, careful and nuanced regulations need to be created such that they balance moral and economic interests. The economic dimension of the e-gaming ecosystem is that it provides states much-needed revenue while states may also be able to attract other hi-tech investments by demonstrating that their policies are supportive of new technologies. Regulating emerging technologies poses a challenge due to uncertainties and the need to examine policy issues from a fresh perspective.
Judicial precedent has established that games of skills are protected under Article19(1)(g) of the Constitution, yet some states have imposed a blanket ban due to the morality argument. There is, thus, the scope for a central model framework in policies and judicial orders.
This is authored by Vishakha Bhagwat and Karishma Sharma.
- Building up the e-gaming ecosystem of India and the influence of smartphones report by IAMAI
- Fantasy Sports: Creating a virtuous cycle of sports development report by the Federation of Indian Fantasy Sports (FIFS) and Deloitte