At $131 million, funding for Indian online gaming platforms at 6-year high in 2020

The pandemic-induced lockdown forced most people in the country to take to the Internet for their everyday needs. Online gaming platforms were among the beneficiaries from this trend and this is reflected in the investments that the segment attracted last year.

According to data from Tracxn, a firm that tracks investments and financials of private companies and start-ups, $131.1 million was invested in the online gaming sector in India in 2020, the highest in the last six years. The number of firms that received the funding also climbed to 11 companies; another six-year high.

Online gaming platforms include companies that host one sport or a variety of sports online and allow users to play them on the web or on mobile phones through apps.

MPL, for example, is a mobile-only platform that hosts multiple games of different categories ranging from chess to fantasy cricket to Ludo through MPL’s Android and iOS apps.

RummyCircle.com, on the other hand, is an online rummy platform that allows users to play rummy on both mobile phones and laptops.

MPL, RummyCircle.com, WinZO, Ability Games, and Gamezop are among the top five Indian online gaming platforms that have the highest valuation, according to data from Tracxn.

Increased interest

“Gaming has been on an upward trajectory in India for over three years. Last year’s lockdown was a black swan event that accelerated the rise of this industry with user engagement increasing on e-sports and skill-gaming platforms,” said Sai Srinivas, Co-Founder and CEO, Mobile Premier League (MPL), adding, “Last year, the focus also turned to games that are made in India by Indian game developers and studios and investors made a beeline as they saw potential in the sector.

“Further, with Internet penetration in India only increasing and digital payments catching on beyond the metros, a lot of the tier-2 and tier-3 cities’ population started taking to e-sports and gaming in a big way. All these factors contributed to the sector attracting investment.”

The ban of Chinese apps in India provided a latent opportunity for Indian companies to fill the void, said Saumya Singh Rathore, CO-Founder, WinZO Games, adding that due to the ban of apps such as PUBG, TikTok and Helo, the Indian masses were seeking alternative sources of entertainment and this led to a rise in the launch of indigenous cutting edge tech products in India.

More firms founded

The number of new companies founded in this space in India stood at 19 last year, the highest when compared to countries such as the US, the UK and China.

“In India, a combination of three factors — cheap and fast data, affordable smartphones, and easy digital payments — have converged at the right time to give people access to e-sports and skill-based mobile gaming,” said Srinivas, on the edge that India has over other geographies in this space, adding, “And given the penetration that Indian gaming platforms are seeing in tier-2, tier-3 cities and beyond, e-sports and gaming can be truly democratised in India via mobile platforms, where the location of the gamer will not matter.”

Greater potential

According to a recent Deloitte report, the number of online gamers in India also surged to 326 million in 2020 from 269 million in 2018, and this figure is projected to grow further to 368 million by 2022. The market size of the Indian online gaming industry is expected to climb to $2.8 billion by 2022, from an estimated $1.5 billion in 2020.

“Regulatory clarity will definitely help attract investments as it does away with any ambiguity around the sector,” said Srinivas, adding, “With e-sports being recognised globally on par with traditional sports (it is a medal event in the 2022 Asian Games), the onus is on all stakeholders to develop the sector and recognise and nurture talent.”