State of India Gaming FY’23

Leveling up: State of India Gaming FY’23
Executive Summary
October 2023
In collaboration with

2
India’s gaming market shows resilience in FY23 with promising engagement and monetization trends
Growth in number of gamers, rising number of paying users, a growing appetite to experiment with new IPs, and increased time spent
on games paint a positive outlook for the sector in the coming years. While new tax policies are expected to adversely impact the RMG
segment, new government initiatives for the overall industry are favourable.
HIGHLIGHTS
• India’s gaming market hit $3.1 Bn in FY23 and is
projected to reach $7.5 Bn by FY28.
• Future growth is expected to be driven by growth in in –
app purchases and ad revenues in casual and midcore
games.
• Growth in RMG over the coming years is expected to be
muted due to recent tax policies and industry
consolidation.
India’s gaming market is projected to grow at a CAGR
of 20% to reach $7.5 Bn in FY28
Source: Third party analytics data providers, secondary research, Lumikai proprietary data, primary survey & expert interview s
Users showing propensity to experiment with and pay
for new IP
• Of the surveyed users, 41% mentioned that they’ve
graduated from playing casual games to all kinds of
games, while 28% showed a proclivity to experiment with
new genres.
• Over 58% of users said they partake in in -app purchases,
with 62% of users claiming that UPI is their preferred mode
of payment for games.
The government has been actively involved
with the gaming industry in the past year

• Government policies have made a clear distinction
between games with cash -based outcomes and games
with non -cash-based outcomes.
• The AVGC taskforce recommendations and the
recognition of esports as an official sport has lent
credibility to the overall gaming industry.
• New tax policies in RMG are expected to adversely
impact companies in the short to medium term.
• The number of gamers in India grew by 12% compared to
last year, while the number of paying users grew by 17%.
• With 15.4 Bn game downloads, India retained its spot as a
key leader in global game downloads.
• Avg time spent on gaming increased by 20%, to 10 -12
hours per gamer per week.
India was home to 568 Mn gamers in FY23, of which
25% were paying users
• ARPPU reached $19.2 in FY23, growing nearly 10x
since FY19.
• Estimated IAP revenues from games other than BGMI
and FF grew 37% year -on-year.
• Casual games showed increasing monetization, with
revenue growth consistently exceeding download
growth in the segment in the last 3 years.
In-game monetization stayed stable despite the
suspension of BGMI and Free Fire
• The male to female ratio of gamers is roughly 60:40, with
an increase in number of gamers in non-metro regions.
• Most users stated that they play games to unwind or
socialize with friends, and that they stop playing a game
once they’ve accomplished objectives or if they see too
many ads.
• Recommendations from friends and family is the key
method of discovering new games.
Pan- India survey of >2000 users provides insights into
gamer behavior

3
MARKET OVERVIEW
The Indian gaming industry clocked $3.1 Bn in FY23, and is set to hit $7.5 Bn by FY28
In-app purchases and ad revenues are expected to drive growth on account of structural shifts towards higher propensity to pay i n-
game, and growing prominence of casual and midcore games by FY28. RMG revenue grew by 33% in FY23, however given recent
taxation policies, we expect RMG growth to slow down on account of heavy tax liabilities and consolidation in the industry.
Midcore and casual will be key drivers of revenue over the next 5 years Monetization over the coming years will be driven by IAPs and ad revenues
1.52.0
2.4
0.5
0.72.3 0.6
0.4
2.7
0.03
0.04 0.1 2.6
3.1
7.5
FY22
FY23FY28E
Esports and others
Midcore and core
Casual and hypercasual
RMG
CAGR (FY23 – 28)
25%
49%
26% 5%
Gaming Market Size in India: Growth by Category ($Bn)
Category
Gaming Market Size in India: Growth by Revenue Stream ($Bn)
1.52.0
2.4
0.6
0.5 3.3 0.5
0.6
1.7
0.03
0.04 0.1 2.6
3.1
7.5
FY22
FY23FY28E
Others*
Ads
IAP
RMG
CAGR (FY23 – 28)
25%
23%
46% 5%
Category
19%
20% 20%
19%
*Others’ includes virtual gifting/tipping, subscriptions, and game pass purchases Source:
Lumikai Analysis based on third party analytics data providers, secondary research, Lumikai proprietary data, primary survey & expert interviews

4
GAME ENGAGEMENT
Sustained increase in engagement has contributed to the growth of the Indian gaming industry
The total number of gamers grew by 12% in 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 Bn downloads, India is among the top countries in the world for total
mobile game downloads.
Over 50% of India’s internet users are gamers 1 India is home to over half a billion gamers, growing at 12% y -o -y 1
Average time spent on gaming has increased from the previous year 2 India is among the top countries for total mobile game downloads 1
Paying
Users
Smartphone
Users
Gamers
Internet Users
FY23
% of Indian population
881 Mn , 4% y -o -y growth
821 Mn , 9% y -o -y growth
568 Mn , 12% y -o -y growth
140 Mn , 17% y -o -y growth
62%
58%
40%
10%
400 450507568
FY20
FY21FY22FY23
NUMBER OF GAMERS (Mn)
FY23 DOWNLOADS (Bn)
ChinaIndiaUSABrazilIndonesia
4.7 4.7 4.4 25.9 15.4
Source: 1: Lumikai Analysis based on third party analytics data providers, secondary research, Lumikai proprietary data, prim ary survey & expert interviews
2: Lumikai analysis based on primary survey by Lumikai
ATS ON GAMING PER USER PER WEEK (HOURS)
FY22
9 – 11
FY23
10 – 12

5
GAME MONETISATION
In-game monetization remained stable in FY23, despite the suspension of BGMI and Free Fire
In -app revenue outside of BGMI and Free Fire grew 37% year -on -year, driven by steadily increasing monetization across other casual
and midcore games, revealing growing experimentation with newer IPs by Indian gamers.
Estimated IAP revenue from games other than BGMI, Free Fire grew 37% y -o -y Estimated ARPPU has increased almost 10x since FY19, reaching $19.2 in FY23
Number of paying gamers grew by 17% in FY23 Monetization is improving steadily for the casual genre
$2.0$8.0$16.0
$20.0
$19.2
FY19 FY20FY21FY22FY23
ESTIMATED ANNUAL ARPPU ($)
32%
-8%-6%
33%
33% 54%
FY21
FY22FY23
% Change in downloads % Change in revenues
Aggregate ad eCPM in India
Playable
Ads
Interstitial
Ads
Banner
Ads$1.75
$1.33
$0.07
CASUAL REVENUE GROWTH EXCEEDS
DOWNLOAD GROWTH 1
Source: Lumikai Analysis based on third party analytics data providers, secondary research, Lumikai proprietary data, primary survey & expert interviews
1: Based on top 10 grossing casual games in FY23
FY22 FY23
37% $236
Mn $323
Mn
Estimated IAP revenues from games other than BGMI, Free Fire
80 96120
140
20%
21% 23%25%
15% 25%
0
100 200
FY20
FY21FY22FY23
NUMBER OF PAYING GAMERS (Mn)
Conversion rate (%)

6
INDIA GAMER SURVEY
Insights from pan-India survey (1/2)
A sample of 2,317 respondents was surveyed across different demographics to gain insight into gamer and non- gamer motivations,
behaviours, preferences, and monetisation propensity.
Demographic breakdown Gamer preferences
Gender-ratio of gamers
59%
Male players
41%
Female players
59% of gamers were
men and 41% of
gamers were women
50% 29% 21%
18- 30 31-
45 45+
Age distribution of gamers
50%
of gamers were
in the age group 18 -30
years
Metro vs Non -metro
43%
34%
57%
66%
2022 2023
Share of gamers
from non- metro
cities has
increased from 57% in ‘22 to
66% in ‘23 Metro
Non –
metro
To kill time or as distraction Relaxation or destressing Socialize with
other gamers Completed game
objectives Too many ads Game fell out of trend
Top 5 game discovery and selection methods
1 2 3 4 Friends/ Family
recommendations Playstore
/
Appstore In app
advertisements
Direct search
on app stores 5 Game reviews
from media
Top 3 motivations to play Top 3 reasons to stop playing
Top games played
4
Hypercasual
Ludo King
Candy Crush
Temple Run
Free Fire Carrom King Subway
Surfers
Bubble
ShooterBGMI/PUBG
Dream11
1
Casual
2
Midcore
3
RMG
4
Hypercasual
2
Casual
3
RMG
1
Midcore
Top games that gamers pay for
Dream11
BGMI/PUBG Free Fire
Ludo King MPLRummy
Candy Crush
Carrom King Clash of
Clans
1 2 3 1 2 3
Note: Survey results based on user behavior over a 12 month period from Sept 2022 to Sept 2023.

7
INDIA GAMER SURVEY
Insights from pan-India survey (2/2)
User behavior reveals a growing propensity to experiment with new games and IPs, with 20% more average time spent on games th an
the year before, alongside an increasing desire to spend money in games.
Engagement behaviour Payment behaviour
41%
28%
23%
18% Earlier I used to play casual games, now I play all kind
of games
Earlier I used to play the same game and now I
experiment with new gaming genres
Earlier I used to play games for free, now I also spend
money in games
Earlier I used to play games, now I also watch live
game streams or stream games myself
Change in time spent playing
games over last 12 months
2.6 3
3.8
2.5 2.8
3.4
3.9 4.7
3.3 3.3
2023
2022
Hypercasual CasualMidcore
PC/Console RMG
Avg. weekly hours spent on gaming Top kinds of payment made Top preferred mode of
payment
58%
In app-
purchases 49%
Subscription
48%

Real Money
Gaming
17%
Virtual gifting and tipping
62%
UPI
26%
Wallet
7%
Credit Card
5%
Debit Card
0.3%
Cryptocurrency
Awareness of recent TDS and GST changes in RMG and fantasy segment
43%
Knew about GST and
TDS both
35%
Did not know
11%
Knew about GST only
11%
Knew about TDS only
Around 60% users have said that new GST and TDS rules would negatively impact how much they play
43%
No
27%
Yes – both are
the cause
14%
Yes -GST is
the cause
16%
Yes – TDS is
the cause
Note: Survey results based on user behavior over a 12 month period from Sept 2022 to Sept 2023.
25% of gamers have
spent money on games/ gaming platform
Paying user conversion

8
GOVERNMENT REGULATIONS
Government regulations are shaping the gaming industry
Government policies have established separate legislation and taxation between games with cash-based outcomes and games with
non -cash based outcomes. Despite the headwinds facing the RMG sector, the broader policy outlook on gaming, animation, and VFX
is positive and favorable.
AVGC Promotion Taskforce report was released in 2022 Recognition of esports as an official sport has lent credibility to the segment
RMG taxation to adversely impact companies in the short to medium term
THREE BROAD PILLARS OF INDIA’S AVGC VISION
1 Create in India Create world-class products Promote Indian content
RECOMMENDATIONS FROM THE REPORT
1
Market Development
 Awareness campaigns
 Annual AVGC Expo, “Game India
Hackathon”, other events
 AVGC startup and SME
representation at events
 IP protection framework
Infrastructure
 Nat’l CoE to oversee AVGC
development
 Regional CoE at state level
 R&D labs at IITs, NITs, IISC
 Centers of entrepreneurship
 Tech incubators, software access
Talent development
 UGC -recognized curriculum
 Standardized degree courses
 AVGC scholarship(s)
 Skill partnerships with industry
 Job aggregation portal to be set up
by industry players
AVGC Incentives
 Tax breaks for 3 -5 years for global
players to set up shop
 Local production grants
 R&D grants for industry
 Concessions and subsidies on power
bills
Officially
recognized
sport by GOI 15- member
Indian esports contingent
MP Gov’t
U18 esports
tournament and academy India wins bronze for Dota 2 at the
Commonwealth Games 2022
GST ON RMG
 MEITY: nodal ministry for online
gaming
 Amendments to IT rules notified in
April 2023 to regulate gaming
 SRB- based regulation
proposed
 3 SRB proposal
applications received
SRB
-BASED REGULATION OF RMG BY MEITY
PREVIOUS
18% of
GGR 28% of
deposit
TAX DEMANDS EXCEED ESTIMATED REVENUE
CURRENT
Source: Lumikai Analysis based on third party analytics data providers, secondary research, Lumikai proprietary data, primary survey & expert interviews
1: List is not exhaustive
2: Based on publicly available information on 4 of the top RMG companies in India
2 3
$ 8 . 9 Bn VALUE OF NOTICES SERVED 2 $ 4 Bn ESTIMATED REVENUE 2
FY 18- 23

9
156 135 415 1,744
567 3,017
TREND SPOTTING
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.
Gaming has been a key benefactor of the rise in digital consumption India is increasingly cementing its position as a development hub for world
-class games
DATA INFRASTRUCTURE
15 25
30 59
CY21 CY22CY23CY28P
PER CAPITA DATA USE (GB)
0.17
5.62
COST / GB ($)
117 47
Q1’23 Q2’23Q3’23Q4’23
DATA SPEED RANK (OF 200)
20 112670
FY23 LTM2028P
TOTAL 5G SUBS (Mn)
DIGITAL PAYMENTS GLOBAL DEVS IN INDIA
1 FROM INDIA TO THE WORLD 1 COMBINED 4
-YEAR
HISTORICAL REVENUE
SPEARMINT GAMES
$900M
of top 5 Indian developers till ‘FY23
Source: Lumikai Analysis based on third party analytics data providers, secondary research, Lumikai proprietary data, primary survey & expert interviews
1: List is not exhaustive
Investment trends
Investments ($ Mn)
Funding in t he Indian gaming sector is
down 75% y -o -y in 2023, mirroring the
global funding decrease of 79% y -o -y.
ACTIVE FUNDS 1
Target investment of $150 Mn
in funding; separate incubator
with investment ranging $50K-
$150K per team
India
Hero Project
incubator program to
support emerging studios
New $50 Mn CVC fund
STRATEGIC INVESTORS
TOTAL INVESTMENTS 5.3 12.522.3 45.9 83.7
FY19 FY20FY21FY22FY23
UPI TRANSACTION VOLUME (Bn)

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12
Glossary
APPENDIX
ARPPU Average Revenue Per Paying User
ATS Average Time Spent
AVGC Animation, Visual Effects, Gaming & Comics
BGMI Battlegrounds Mobile India
BN, MN Billion, Million
CAGR Compound Annual Growth Rate
CoE Center of Excellence
eCPM Effective Cost Per Mille
FF Free Fire
FY Financial Year
GB Gigabyte
GOIGovernment Of India
GST Goods & Services Tax
IAP In-app Purchase
IP Intellectual Property
MKT Market
RMG Real Money Games (includes Fantasy)
SRB Self Regulated Body
TDS Tax Deducted at Source
UGC University Grants Commission
UPI Unified Payments Interface
VC Venture Capital