Analysis of the computer games market in India
The relevance of research
""Computer games"" is a collection of games intended for use on a personal computer (PC). However, the gaming market considered in this study has a much wider scope: in addition to PC games, there are games for consoles (set-top boxes), games - mobile applications, games built into the interface of social networks, etc.
Purpose of the study
Analysis of the state of the computer games market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the computer games market
Content
Part 1. Overview of the Indian PC games market
1.1. Definition and Characteristics of the Indian PC Game Market
1.2. Dynamics of the volume of the Indian computer games market, 2015-2019
1.3. Market structure by type of service provided in India
1.4. Structure of the computer games market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive Analysis in the Indian PC Game Market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of the consumption of computer games
3.1. Estimated consumption of computer games per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast of the development of the computer games market until 2024
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian PC games market
1.1. Definition and Characteristics of the Indian PC Game Market
In a narrow sense, ""Computer Games"" is a collection of games intended for use on a personal computer (PC). However, the gaming market considered in this study has a much wider scope: in addition to PC games, there are games for consoles (set-top boxes), games - mobile applications, games built into the interface of social networks, etc.
Computer games are mainly classified by genre as well as by the number of players.
Due to the fact that the criteria for a game to belong to a particular genre are not unambiguously defined, the classification of computer games is not sufficiently systematized, and data on the genre of a particular project may differ in different sources. However, there is a consensus that game developers have come to, and a game's belonging to one of the main genres can almost always be unambiguously determined.
Rounders (from the English shoot - shoot), or ""shooters"" - a type of game in which the player, in most cases, acting alone, needs to destroy opponents using various weapons. Depending on the specific game, the player can use both modern weapons, their futuristic counterparts, as well as completely unique weapons invented by the game developers.
Actions (from the English. Action - action) - one of the most popular types of computer games in which the success of the player to a large extent depends on the speed of his reaction and the ability to quickly make the right decisions. The action in most action games develops very dynamically and requires attention and a quick reaction to the events. Weapons or the hero's melee abilities are most often used as the main promotion tools in the game.
Strategies (strategy computer games) - require the player to plan and develop certain tactics and strategies to achieve the desired goal, for example, winning a military operation or capturing an enemy state.
The player controls not a single character, but armies, cities, states, or even civilizations.
Arcades (arcade games) - have a simple gameplay that does not change during the game. In most arcade games, the player needs to have good reactions in order to achieve results. Usually in arcade games, a system of bonuses is developed: scoring points, temporary improvement in character characteristics (weapons, speed, etc.).
Puzzles are a type of computer games, for the passage of which the player is required to solve problems that require logic, imagination and intuition. Puzzles are usually integrated into the story, and the main focus of the game is on solving them.
Racing is one of the most popular types of games in which the player driving a vehicle has to be the first to reach the finish line. The most popular type of racing games are racing cars, but there are many races on other vehicles (up to spaceships).
Quests (from the English quest - searching for adventures), or adventure games, are usually games in which the hero moves through the plot, completes various tasks and interacts with the game world through the use of objects, communication with other characters and solving puzzles.
There are other genres of games and games with elements of several genres.
Also, games are divided into 2 types: single-player and multiplayer games. Many games have a choice between single player and multiplayer modes, but also many games have them available together.
The following types of gaming platforms are distinguished in the world:
Personal computers.
Game consoles / consoles.
Mobile phones and PDAs.
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Based on the number of platforms the game runs on, there is the following division into:
1) Multiplatform/Multiplatform games (released on two or more platforms).
2) Single-platform games (released on only one platform - platform exclusives).
1.2. Dynamics of the volume of the Indian computer games market, 2015-2019
Consider the dynamics of the volume of the computer games market in India. The analysis of the indicator is significantly complicated due to the fact that the market includes many diverse components, for which there are no data in the sources of official statistics.
In the game consoles subcategory, revenue includes all revenue related to games of any type for game consoles (for playing at home or on portable consoles), including sales of games on physical media (disc) in retail stores, sales of digital games, additionally downloadable subscription content and services.
PC game revenue is generated from sales of physical media (disc) games at retail stores and digital games from digital video stores (such as Steam and Origin) as well as additional downloadable content.
Online gaming revenue includes revenue from PC games that require an internet connection, including subscriptions to massively multiplayer online games (MMOs), free-to-play MMOs, casual games and social media games.
The mobile games category includes all revenue related to gaming on mobile devices (tablets or mobile phones), including revenue from the sale of digital games and applications, from the provision of subscription services and from the sale of related virtual items.
Video game advertising revenue includes all advertising revenue related to games on any platform and for any type of access, including in-game advertising. It does not include advertising delivered dynamically over the Internet.
Diagram 2. Dynamics of the volume of the computer games market in ruble terms, 2015-2019, billion Rs.
Note that in the computer games market, it is customary to display volumes in dollar terms.
However, the complexity of assessing the volume and dynamics of the market is also noted by other authoritative sources.
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1.3. Market structure by type of service provided in India
The share of browser and social games is generally small, but in India the audience in this segment is likely to be slowly moving to mobile applications. Although the esports segment is still small in absolute and relative terms, market experts argue that it has significant potential in the medium term (see section 1.5).
As for the dynamics of market shares in India by segment over the past few years, there is a certain difficulty in determining the structure, as different authoritative sources of information offer different data, and at the same time, the classification of types of games and platforms often differs in the sources:
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According to the presented data, only the following conclusions can be unambiguously drawn: the popularity and share of mobile games has increased, social games have decreased, and PC games (including multiplayer games) have changed insignificantly.
1.4. Structure of the computer games market by Union Territories
The calculation of the structure of the gaming market for the Union Territories was made by GidMarket on the basis of data on the dynamics of the average annual resident population in the Union Territories, the dynamics of per capita income in the Union Territories. An adjustment was also made for the deviation of the level of Internet penetration in the federal districts from the average for India.
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1.5. Assessment of current trends and development prospects of the studied market
The main trends and tendencies of the Indian gaming market are:
Growth of the mobile games segment. The mobile games segment is growing rapidly. The game development cycle in this market niche is shorter, new interesting products appear all the time, and besides, Indian developers are traditionally strong in this area. The growth of technical capabilities and the spread of high-speed mobile access to the Internet also have a positive effect on the development of the segment, especially in its multi-user part.
The mobile market is very different from PC and console. It is not tied to the platform: almost everyone has a smartphone, which means that everyone can play at any time. At the same time, even the most advanced smartphone will not provide gaming capabilities comparable to a PC. Therefore, there are practically no expensive projects in the mobile segment, and the most popular genres are simple ""farms"" and puzzles. The ads embedded in them, as well as in-game purchases, bring a significant part of the profits to developers.
In mid-2018, the term “hypercasual game” gained popularity, exemplified by the mobile game HelixJump, which overtook Fornite in terms of downloads to become the most downloaded game of the year (334 million downloads). The popularity of HelixJump has contributed to the development of this subcategory of casual games, as a result of which many similar projects have appeared in the AppStore and GooglePlay mobile applications.
Hyper-casual games are characterized by simple, unpretentious gameplay that can be mastered very quickly without much effort, and a clear way to monetize. But most importantly, large companies began to invest in such projects.
Today, this segment is highly competitive: every day there are many hyper-casual games that compete for the attention of users. The theme of games changes frequently due to low user retention and short customer lifecycle.
With the growing popularity of multiplayer online PC games and the spread of electronic content distribution services in India, sales of boxed PC games continue to fall.
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Personalization. Experts report that as the level of ""connectedness"" of consumers in the world increases, their behavior becomes more and more similar, keeping only two differences.
The first difference lies in the quality of the existing infrastructure suitable for content consumption. The second difference is the general desire of consumers to have content experiences that are relevant to them personally, and therefore, even in a globalized world, understanding national priorities is crucial.
According to Wargaming and Superdata experts, India is an attractive market for international game publishers. But in order to succeed in the CIS, you need to be aware of the preferences of the players.
The prospects for the Indian computer games market include:
The driver for the development of the mobile segment of the gaming market will be the widespread emergence of 5G technology networks, which can provide even faster Internet connection and data transfer. This will affect not only movies and TV shows, but also sports broadcasts, games and, of course, augmented reality.
Development of cloud gaming (cloud gaming). The current crisis has caught the gaming world in the midst of a massive transformation towards cloud gaming.
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New players. Recently, in addition to Indian game developers, Indian mobile operators have begun to pay more and more attention to eSports and gaming in general: Beeline, MTS, Megafon and Tele2.
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Virtual reality. An important moment in the development of the gaming segment may be the emerging trend of VR integration, however, high prices for equipment and a small number of games still have a negative impact on sales. The gaming business is driving the Indian VR market.
Video game enthusiasts are not only pioneers in the use of VR gadgets, but also the most active consumers of content.
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1.6. Assessment of factors affecting the market
Macroeconomic factors influence the dynamics of all sectors of the Indian economy, including the computer games market. The main groups of factors are: economic, political, social and technological.
Economic
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
Chart 6 shows India's GDP growth rate from 2007 to 2019 at comparable prices (at 2016 prices).
Chart 6. Dynamics of India's GDP, 2007-2019, Q1 2020, % to the previous year
Let's take a look at some experts' assessments:
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In addition, there is an increase in prices for imported equipment and electronics, which are used by the population for games.
Dynamics of electricity prices. The dynamics of tariffs for electricity and electricity supply services affect any industry. As shown in the table, producer prices for electricity and services increased in the period under review.
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Index of industrial production - an indicator of the dynamics of the volume of industrial production, its rise or fall, is determined as the ratio of the current volume of production in monetary terms to the volume of industrial production in the previous or other base year. This index characterizes the change in GDP due to the fundamental sectors of the economy: mining, manufacturing, production and distribution of electricity, gas and water.
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Социальные
Diagram 11. Population dynamics in India as of January 1, 2010-2020, million people, %
Urbanization.
The presence of a formed culture of consumption.
Self-isolation, quarantine measures due to the coronavirus pandemic.
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technological
Import dependence on the market of platforms for games. Most of the electronic and technical devices used by gamers for entertainment, developers to create games are imported.
The development of the global Internet network, the availability of its use for the population, as well as the growing popularity of Internet sales have a positive effect on the development of the market in question.
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Political
The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy.
Credit policy. Today it is quite difficult to imagine the progressive development of the economy without the active participation of the credit system. It should also be noted that the assessment of the availability of credit resources for both legal entities and individuals is a significant indicator that allows assessing not only the demand for credit funds, but can also serve as a reflection of the real economic situation both in the region and in the economy as a whole.
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Chart 15. Dynamics of the average interest rate on loans, 2014-2020 (Jan-Feb.), %
State regulation is a factor that generally has a significant impact on the current market situation. It is a set of centralized administrative influence on the activities of a sector of the economy through the formation of a regulatory and legislative framework.
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India's E-Commerce Development Strategy 2025, published in 2017, covers a wide range of electronically mediated relationships in both domestic and cross-border retail (B2C) and wholesale ( B2B) trade.
Obviously, it is necessary to create in India a set of favorable regulatory, organizational and technical conditions to stimulate the business activity of e-commerce participants, create a competitive environment and create a comfortable consumer climate for the population. The main objective of the Strategy in this area is to create additional market mechanisms that ensure the growth and development of e-commerce in India, taking into account the predicted external and internal conditions, the effective use of its resources and potential, including through:
- ensuring the widest possible opportunities for the legal development of electronic commerce by increasing entrepreneurial activity and expanding the private initiative of entrepreneurs;
- removal of excessive prohibitions and elimination of legal conflicts for electronic commerce, which are absent in traditional commerce;
- promoting the implementation of an objective assessment of the state and planning of directions for the development of electronic commerce by ensuring the availability and completeness of open data related to electronic commerce, as well as considering the possibility of using intelligent technologies that provide aggregation, processing and analysis of data in the field of electronic commerce;
- ensuring effective regulatory and legal regulation of electronic transactions, improving payment systems in the field of electronic transactions, ensuring legal protection of participants in electronic commerce (sellers, buyers, third parties);
- ensuring balanced business conditions for Indian online stores and foreign online stores selling goods directly to individuals in India;
- increasing cybersecurity in the field of electronic commerce in the domestic market and in the field of cross-border electronic commerce.
Let's take a look at the main factors.
Table 7. STEP analysis of factors influencing the computer games market
In general, GidMarket analysts currently assess the impact of macro factors on the computer games market as neutral, that is, positive and negative factors have approximately the same impact, which is generally a positive trend in the current economic crisis and the coronavirus pandemic.
1.7. Analysis of sectoral indicators of financial and economic activity
Since there is no separate OKVED code for the activities of companies engaged in the development of computer games, indicators for the OKVED2 code (62.01) Development of computer software were used to analyze financial ratios.
Important data for analyzing the state of the industry is the dynamics of such indicators as profitability, liquidity, and business activity.
The table shows the dynamics of the gross profit margin (the ratio of gross profit to income).
Table 8. Gross margin of the computer games industry in comparison with all sectors of the Indian economy, 2015-2019, %
The estimated indicator of the current liquidity of a normally operating solvent legal entity must be at least 1, i.e. it is necessary that the total value of current assets be greater than the amount of short-term liabilities.
If the current liquidity ratio is greater than 2, this indicates that the company has more current assets than short-term liabilities with double coverage. The company has a high ability in the short term to pay off its obligations (debts). The normative value of current liquidity equal to 2 was obtained in practice and is most often found in domestic regulations.
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Business activity is the ability of an enterprise, based on the results of its economic activity, to take a stable position in a competitive market, it is the performance of an enterprise in relation to the amount of resource consumption in the process of the operating cycle. Indicators of business activity are related to the rate of turnover of funds: the faster the turnover, the less semi-fixed costs per turnover, which means the higher the financial efficiency of the enterprise and the industry as a whole as a combination of many enterprises.
Consider the dynamics of the average turnover of receivables in the computer games industry in India.
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The stability of the financial position of the enterprise is impossible without effective management of working capital, based on the identification of significant factors and measures to provide the enterprise with its own working capital.
The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise.
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Thus, in aggregate, the dynamics and level of financial ratios in the computer games industry can be characterized positively.
Part 2. Competitive Analysis in the Indian PC Game Market
2.1. Major players in the market
One of the key features of the gaming market is the wide range of games of various genres developed and published by a variety of Indian and foreign manufacturers. At the same time, there is a significant variety of platforms for games: consoles, PCs (you can play offline and online), tablets, smartphones. At the same time, many companies participating in the computer games market are engaged in development or publishing in several sub-segments, which further complicates the analysis of the competitive environment.
Since one of the fastest growing, growing and promising segment is the development of mobile games (applications), we will consider Indian manufacturers operating mainly in this sub-sector.
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2.2. Market shares of the largest competitors
Diagram 20. Shares of the largest competitors in the computer games market in 2019, %
Note that the analysis of competitors, their revenues and market shares is significantly difficult due to the following points:
- Market operators rarely indicate the name of the legal entity to which the income of the game developer company is registered, or the developer company can be presented in the format of individual entrepreneurs, for which there are no revenue data in the sources of official statistics;
- There is an error associated with the impossibility of dividing companies' share in revenue from Indian players and residents of other countries where the company's games are distributed, as well as other activities.
According to GidMarket, the leading mobile game developers in India are the following companies:
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2.3. Profiles of major players
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The dynamics of the total revenue of the leading developers of mobile games in India has a linear pattern - the figure has been increasing annually, which is associated with the growth in popularity of mobile games in recent years.
Part 3. Analysis of the consumption of computer games
3.1. Estimated consumption of computer games per capita
The indicator is calculated by GidMarket as the ratio of the market size to the population of India in the corresponding year.
3.2. Market Saturation and Estimated Market Potential in India
According to experts, the Indian gaming market has not yet reached saturation. At the same time, the following comparisons allow estimating the potential capacity:
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3.3. Description of consumer preferences
We present consumer preferences and opinions based on data from VTsIOM surveys conducted in August and September 2019.
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The opinion of citizens about the social effects of computer gambling is also interesting:
..% of respondents report that children or grandchildren play video games most often in their family
Every tenth Indian has recently had a spouse playing video games
A quarter of Indians have a positive attitude towards the passion of households for video games
..% of Indians believe that computer games cause more harm
Among the negative consequences of video games, Indians most often single out those associated with poor health: addiction — …%, visual impairment — …%, negative impact on the psyche — …%, degradation of mental abilities — …%
According to Indians, the positive aspects of playing video games include: development of logical thinking — …%, increased reaction speed — …%, relaxation, stress reduction —…%, increased intelligence and general development — …%
3.4. Price analysis
Video games are a product of intellectual property and pricing in this market is usually not transparent, since the cost is based not on the costs of producing a particular material unit, but on the expected profit.
As a rule, the prices for computer games offered for sale in online stores are the same for all regions of India where these stores are present (there are pick-up points or there is the possibility of delivering goods home). The difference in the total amount spent on the purchase of the game between regions depends only on the cost of delivering the goods to the pickup point or the cost of courier delivery services.
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Part 4. Assessment of factors of investment attractiveness of the market
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The positive factors of the investment climate in the computer games market dominate the negative ones.
The most significant positive factors.
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The most significant negative factors.
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Part 5. Forecast of the development of the computer games market until 2024
In the first half of 2020, many markets felt the impact of the pandemic and the onset of the economic crisis.
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However, the gaming market is weathering the pandemic more easily than almost any other. The growth of the audience plays into his hands, a significant part of which, having once bought a game console, smartphone or PC, will continue to play further.
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Thus, since the computer games market is not included in the above lists of branches of the Indian economy, there are no specific measures for state support of enterprises in the analyzed market.
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
The main trends in the computer games market are: the growth of the mobile games segment, the development of the “hyper-casual games” segment, the decline in sales of boxed PC games, the re-release and remakes of old games, and personalization at the national level.
Among the prospects are: the widespread emergence of 5G technology networks, which will become an additional driver for the development of mobile games, the development of cloud gaming, e-sports, new market players represented by Indian mobile operators, the development of games in virtual reality.
According to experts, the Indian gaming market has not yet reached saturation.
In general, GidMarket analysts currently assess the impact of macro factors on the computer games market as neutral, that is, positive and negative factors have approximately the same impact, which is generally a positive trend in the current economic crisis and the coronavirus pandemic.
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In the PC gaming market, consumer influence is as follows:
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Factors that reduce the impact on the buyers' market:
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There is also competition between different games: most consumers of computer games have quite diverse interests, so substitute products are not only similar games of the same genre from other companies, but also games of other genres.
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Diagrams
Figure 1. Average monthly data on the overlap of segments of platforms used by unique users in 2019, %
Diagram 2. Dynamics of the volume of the computer games market in ruble terms, 2015-2019, billion Rs.
Diagram 3. Dynamics of the volume of the computer games market in dollar terms, 2015-2019, billion dollars
Diagram 4. The structure of the computer games market by type in India and the World in 2019,%
Diagram 5. Structure of the computer games market in India by Union Territories in 2015-2019, %
Chart 6. Dynamics of India's GDP, 2007-2019, Q1 2020, % to the previous year
Chart 7. Expert forecasts for a decline in real GDP in India in 2020 (baseline/neutral scenario), %
Chart 8. Monthly dynamics of the US dollar against the rupee, 2015-2020 (Jan-Apr.), Rs. for 1 US dollar
Diagram 9. Dynamics of India's IPP in 2014 - 2020 (Jan.-Mar.), % to the previous year
Diagram 10. Dynamics of retail trade turnover, 2013 - 2020 (Jan.-Mar.), % to the previous year
Diagram 11. Population dynamics in India as of January 1, 2010-2020, million people, %
Diagram 12. Population forecast in India for the period 2021-2024, million people
Diagram 13. Dynamics of real incomes of the population of India, 2011 - 2019, % to the previous year
Diagram 14. Share of sales via the Internet in the Union Territories in the total volume of retail trade turnover in 2014-2019, %
Chart 15. Dynamics of the average interest rate on loans, 2014-2020 (Jan-Feb.), %
Diagram 16. Profitability before tax (profit of the reporting period) in the field of computer games in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 17. Current liquidity (total coverage) in the field of computer games for 2015-2019, times
Chart 18. Business activity (average turnover period of receivables) in the field of computer games, for 2015-2019, days days
Diagram 19. Financial stability (security of own working capital) in the field of computer games, in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 20. Shares of the largest competitors in the computer games market in 2019, %
Diagram 21. Dynamics of the total revenue of the largest operators of the computer games market (TOP-5) in India, 2015-2019 (forecast), billion Rs.
Diagram 22. Volume of consumption of computer games per capita, 2015-2019, Rs./person
Diagram 23. Citizens' preferences in choosing a device (platform) for computer games by age in 2019 (closed question, up to three answers, % of those who play video games)
Chart 24. Respondents' opinions on the dynamics of the quality of Indian video games in the last one or two years, (open question, one answer, %)
Diagram 25. Forecast of the volume of the computer games market for two scenarios in 2020-2024, billion Rs.
Tables
Table 1. Dynamics of the volume of the computer games market in ruble and dollar terms according to various sources in 2014-2019, units rev.
Table 2. Expert forecasts for a decline in real GDP in India in 2020 (baseline/neutral scenario), %
Table 3. Average producer prices for electricity in India at the end of the period in 2017-2019, rupees per unit of measurement, CPI for electricity supply services, %
Table 4. Urban and rural population in India in 2014-2019, million people, %
Table 5. Indicators of monitoring the development of the information society in India in terms of the use of the Internet in 2012-2018, units rev.
Table 6. Weighted average interest rates of credit institutions on lending operations in rupees, excluding PJSC Sberbank (% per annum), 2015-2020 (Jan-Feb)
Table 7. STEP analysis of factors influencing the computer games market
Table 8. Gross margin of the computer games industry in comparison with all sectors of the Indian economy, 2015-2019, %
Table 9. Absolute liquidity in the field of computer games in comparison with all sectors of the Indian economy, 2015-2019, times
Table 10. Main companies participating in the computer games market in 2019
Table 11. Basic information about the participant No. 1 of the computer games market
Table 12. Basic information about the participant No. 2 of the computer games market
Table 13. Basic information about the participant No. 3 of the computer games market
Table 14. Basic information about the participant No. 4 of the computer games market
Table 15. Basic information about the participant No. 5 of the computer games market
Table 16. Comparative characteristics of gaming markets in some countries of the world in 2019, units rev.
Table 17. Distribution by age of answers to the question: ""Have you ever played video games, and if so, do you play now?"" (closed question, one answer, %)
Table 18. Consumer price indices in the computer games market in India in 2015-2020 (Jan.-April), %
Table 19. Average prices on the computer games market by Union Territories, delivery and pickup costs in 2020, Rs.
Table 20. Prices for computer games in various online stores in 2020, Rs./unit
Table 21. Assessment of factors of investment attractiveness of the computer games market
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