Is India’s Esports Market Geared Up To Play In The Big Leagues?

With the cancellation of live sports across the globe, sports enthusiasts have been left with no choice but to watch the reruns of old matches on television. But for those who want a taste of the action and that competitive feeling, online gaming has come to the rescue. Esports is already a burgeoning industry in India and with all social interactions shifting online in the pandemic, there’s been a significant uptick in adoption and traction. For instance, viewership for esports on Amazon-owned Twitch has increased by 31% in March after the pandemic, while Facebook also took the opportunity to expand its Facebook Gaming app.

Online gaming, however, is not new to India. It has been a huge draw for most age groups even before the lockdown, thanks to the considerable penetration of mobile gaming. According to a report released in 2019 by KPMG and the Indian Federation of Sports Gaming, India’s online gaming industry is set to grow at 22% CAGR between 2018 and 2023, with esports drawing in major revenue and driving the growth.

Esports is a team-based or solo competitive gaming in titles such as Playerunknown’s Battlegrounds (PUBG), Fortnite, League of Legends, Counter-Strike, Call of Duty, Overwatch and Madden NFL among other games that are live-streamed on Twitch, YouTube and other platforms. Millions of viewers can join in on the action live, while there’s a whole parallel economy of esports betting as well. The esports category is growing at a very rapid pace globally and the 2024 Summer Olympics, which will take place in Paris, will include a demonstration of esports with national teams competing.

In India, esports was widely talked about when it was included as a medal event in the 2018 Asian Games and India won a bronze medal. It gained further popularity in August 2019, when Bhubaneswar hosted the FIFA U-19 qualifier esports tournament that saw a participation of over 130 players. Today, India has turned into a favourite destination for game organisers across the world. For instance, India is today home to big gaming events such as All India Open Esports League, Inter-school technology event organised by Exun Clan, NSG Championship, PUBG Mobile India Series, The Tekken World Tour, ESL (Electronic Sports League) India Premiership among others.

Taiwanese hardware maker Acer also organises Acer Predator Gaming League, one of Asia’s biggest esports tournaments. HyperX has also partnered with ESL India Premiership League, which is the biggest tournament for esports in the country. PUBG Mobile was launched in India in March 2018 and PUBG Mobile Campus Championship was conducted within some months. While that year the prize pool for one competition was around INR 50 Lakh, in 2019 it doubled to around INR 1 Cr.

Current Wave Accelerates Esports Growth

One of the key players within esports in India, Nazara-acquired NODWIN Gaming tied up with Tencent recently to conduct the PUBG Mobile Club Open (PMCO) and PUBG Mobile Pro League (PMPL) circuits in South Asia. The startup had collaborated with Tencent in 2019 for PMCO Spring Split India and the PMCO Fall Split South Asia. Post Covid-19, many others have witnessed increased uptake and many have forayed into new esports partnerships.

Paytm First Games recently kickstarted esports tournaments with Clash Royale and has also partnered with Garena to host its first Free Fire India Solos tournament starting in May. The company has seen a rise in adoption even in the casual games category.

For Bengaluru-based Ewar, it has been less than four months since inception as a mobile gaming app and it has already had a double-digit growth every month.

The platform offers hardcore shooting games including PUBG, FreeFire, Call of Duty competitions, which are streamed live and users can watch the gameplay in the Ewar app itself and follow top players in each game and get notified when they go live for a stream.

Ready To Play

Most online gaming platforms in India have seen a substantial increase in player engagement and more hours are being clocked on platforms. Kalaari Capital-backed WinZo has partnered with Tencent Games and Garena to host PUBG Mobile and FreeFire esports tournaments and both games were launched within a week of the lockdown in late March to meet the increased demand of users. It hosts esports competitions with prize money worth INR 1 Cr on its platform every month. The platform has been experiencing a 30% surge in traffic from metros and Tier-1 cities on a daily basis, it claimes, while the number of concurrent users is increasing at 30%-40% day on day.

Ahmedabad-based Gamerji, which has conducted more than 6000 tournaments to date, has seen a 2.5X surge in traffic for esports post-Covid-19 in terms of user base taking it to more than 150K users a month.

“There is higher player engagement in most platforms and this could potentially boost the esports economy, as most sponsors who would usually partner up with cricket or other major sporting events have all been postponed, this leaves esports as one of the few sporting events that sponsors can partner with to promote their product,” said Yash Pariani, director, Indian Gaming League, a Mumbai-based startup that has seen a 90-100% increase in customer engagement and daily sign-ups within esports since lockdown.

The lockdown period has provided great opportunities for users to experience and engage with esports. For example, Paytm First Games had planned to host 512 players in its first esports tournament with Clash Royal, but the slots filled up in the first few hours and extended registrations by the end of which it received over 12K registrations.

“India continues to be one of the most promising markets for esports in the world in terms of size and potential. Mobile gaming penetration has surged in the past few years fuelled by affordable handsets and lower data costs. Additionally, further penetration of video streaming platforms like Youtube and video-based social networks like Tik Tok has further helped propel the mobile esports friendly games into mainstream,” said Sudhanshu Gupta, COO, Paytm First Games.

How Esports Brings In The Money

Esports startups and companies currently monetise primarily through brand and streaming partnerships as the audience is still only evolving and does not have the capacity to pay in many cases. As the overall market for esports grows, there is also a heightened interest from both brands and streaming platforms to partner and monetise the business. For instance, Amazon recently started offering its Prime members content from internationally popular mobile games like Mobile Legends: Bang Bang and popular Indian games like World Cricket Championship.

“It is a game-changer and is fated to be the next big thing in India. Gaming has evolved into something much more than a mere recreation. Instead of being limited only to a particular time of the day, gamers are now active through the day,” said Parth Chadha, founder, Ewar Games.

According to market researcher Newzoo, 165 Mn esports enthusiasts watch esports globally and the number is expected to reach 250 Mn by 2021 and occasional viewers will take those numbers to 557 Mn by 2021. With such huge numbers, the monetisation modes are multiple starting with media rights, sponsorship, live events to merchandise and the prize money that goes to players or the prize pools for League of Legends or DOTA (Defense of the Ancients).

Partnerships & Entry Fee

For players who have recently ventured into esports in India, it is primarily partnerships and entry fees. WinZO says it partners with gaming studios and indie-developers to solve for the monetisation of their assets. Game developers could be students making games or large Indian studios. For instance, it has partnered with Dumadu Studio, and global giants such as Tencent and Garena. Thanks to the WinZO Game Developer Console, developers can get visibility on revenue from the moment their games are made live on the platform.

On the other hand, Ewar claims to help publish and promote any game in the app within seven days. The revenue is shared with the game developer once the game has gone live. Its model is primarily led by margins earned on games played and through advertisements for casual games. For the esports sector, the major revenue channels are entry fees paid by players as well or commission earned for providing the technology and service.

Paytm First Games has three large verticals of gaming on its platform including casual games, which can be monetised through ads or in-app purchases, skill-based games, which require users to pay a small fee to play and esports, with its multiple revenue channels. Monetisation has been dependent on desktop and console users in the more evolved markets, but in India, mobile is the king. “This opens up a whole new set of brands that seek to partner with popular tournaments and IPs and opens up a bigger pie. Additionally, with the rise of OTT platforms in the country and increasing competition in the segment, we are also seeing monetisation opportunities open up in terms of streaming rights,” said Paytm First Games’ Gupta.

The esports market in India has made a minor dent on the global stage, but no one is in doubt about the promise and the potential. With better infrastructure in place and more opportunities for gamers, more sponsorships are expected to come in soon. As the sport evolves in the country and teams and IPs get bigger, the industry experts expect additional monetisation methods in terms of team franchise, merchandise and more.

“Esports had a small user base in India because these games were primarily played on consoles and PCs but mobile gaming has now changed that. Add cheap smartphones and low data rates to that mix and we now have created the perfect storm moment for esports” said Anirudh Pandita, founder, Pocket Aces.

Pocket Aces’ game streaming platform Loco recently introduced the esports category and has seen 50x more streamer signups than it expected. It has also partnered with Chennai-based esports company Skyesports to stream tournaments every week with a total prize pool of INR 5 Lakh across titles including Call of Duty: Mobile, PUBG, World Cricket Championship Rivals, others.

How India Can Unlock Esports Glory

While the more avid gamers in India started transitioning to esports some years ago, the entry of PUBG, COD: Mobile and Fortnite have expanded the addressable base to casual users as well. This has been driven by faster and cheaper internet access, and falling prices of smartphones that can seamlessly run competitive games, as well as the increased exposure to console and PC gaming.

“Unlike five years ago, when heavy games could be played only on premium phones, over the past couple of years we have seen that even budget smartphones priced in the INR 10K-20K range have upgraded to a level where they can run hardcore games such as PubG, Free Fire seamlessly,” said Mayank Khanduja, principal, SAIF Partners.

India has developed into a first-of-its-kind mobile-led esports market where user adoption is determined by affordable smartphones and tablets. This has been supported by a growing number of advanced gaming cafes across India, adoption of augmented and virtual reality (AR/VR) as well as mixed reality (MR) and the opportunity to compete globally for very large prizes. “Add to that a country with the highest percentage of young population, and you have the perfect recipe for a super successful esports industry,” said Hemant Gupta, MD, Zone Startups India, an international startup accelerator.

WinZo’s Nanda says that gamers are also picking this up as a new age career option, where they are following their passion of gaming and competing in various esports championships worldwide to win cash prizes. Unlike western markets which are primarily PC-led gaming markets or China where device affordability was not a limiting factor for adoption of gaming, affordability of devices that can support core gaming has been a key factor in the adoption of esports in India.

“Over the past couple of years, India has evolved into a mobile device gaming market and this has led to a need for products designed specifically for India. For example, a cloud gaming platform that could allow seamless gaming from even the most primitive smartphones and low internet speeds could significantly expand the market size in India,” Khanduja told Inc42.

One of the watershed moments in online gaming worldwide was the mass adoption for Zynga’s social media game Farmville, which was led by its Facebook integration and saw over 30 Mn people participate in 2009, noted Kalyan Kumar, a gaming expert and CEO and cofounder of Social Catalyzers, a content and influencer marketing firm. “King Digital’s CandyCrush brought another wave of casual gaming adoption and now it’s a flurry for a few like PUBG and so on. The adoption of cricket and fantasy leagues around it also allowed you to get into money gaming with live sport,” Kumar added.

On the demand side, multiplayer social gaming and fantasy gaming have caught the fancy of users. On the infrastructure side, near-universal availability of high-speed internet has improved access and experience of esports. “And on the business model front, real money gaming and platform approach has improved the monetisation of these players in India,” said Pranjal Kumar, principal and CFO at Bertelsmann India Investments.

Will Esports Lead Online Gaming Boom?

One of the new trends observed within the industry is that a lot of esports games such as Ewar are breaking the language barrier owing to voice chat and innovative marketing through video platforms leading more gamers participating from Tier 2 and 3 towns.

“Many games and platforms are also pushing the boundaries of esports with many Indian studios also investing in tournaments in order to establish their games as popular esports,” said Paytm First Games’ Gupta.

The proliferation of esports titles will also lead to a bigger role for vernacular and Indian regional games with a “social” aspect. “As we stay physically distant, people will have a huge appetite for virtual spaces, and games such as Animal Crossing could see success in India too,” said Bertelsmann’s Kumar. Additionally, while advertising-dependent traditional media may struggle, advertising on esports should not get impacted and might actually witness an increase. “Hence, platforms will double-down on the freemium model,” he added.

Many startups have come up with innovative ideas to cater to gaming fans during the lockdown. Nextwave Multimedia, a Chennai-based subsidiary of Nazara Technologies, that caters to 110 Mn cricket fans has roped in former Australian cricketer Matthew Hayden, to offer English commentary to create a realistic cricket experience in the game. He will join former Indian batsman Aakash Chopra, who recently came on board as a Hindi commentator. Since all live cricket matches have come to a halt, this game aims to bridge the interface between playing cricket on the field and in real life.

Nextwave Multimedia has recently seen a surge in sessions and revenue, a 25% increase in new users, and daily active users and over a 100% spike in in-app purchases in the WCC franchise.

The industry also expects a greater layering of both AI and AR/VR contexts that would manifest more and more frequently in games and esports competitions. “Further real-life meets virtual life would be great areas to watch, along with wearable tech and IoT aspects coming into gaming. Honestly, Gaming literally precedes VR thinking that is manifesting in other digital experiences” added Social Catalyzers’ Kumar.

Also, while the industry continues to carry a social stigma of being a hobby and is still quite far away from becoming a full-time profession option, it is spreading to the lower-income segments and to the smaller towns in the country.

“This is fueled by some really large prize money that is offered in the online games. Around 80% of the gamers live in non- metro cities,” said Zone Startups India’s Gupta.

Can Esports Be A Viable Career In India?

“This industry needs only skill without having any age bar, educational streams, scoring percentile and India is full of talented gamers. Proper availability of hi-speed internet, high-quality hardware, changing mindsets of parents and interest shown by big industrialists in this as a business opportunity are among major factors to make this industry thrive in India,” said Mehul Acharya, cofounder, GAME, game art and multimedia engineering institute in Dombivli in Maharashtra’s Thane district.

By the end of this quarter in June, the dearth of live events means fantasy gaming is expected to suffer. This is expected to positively impact esports and casual gaming as a large percentage of fantasy gamers who hadn’t been exposed to esports earlier might start playing hardcore games to fill the void left by the lack of fantasy games, and also as a means to earn extra income.

In a nutshell, the pandemic has established that the gaming era is here to stay. Within the gaming, esports industry is expected to get a major bump thanks to higher engagement, expanding addressable base and the prospects of earning extra income through gaming.

“The need for challenge and thrill in the world of gaming is so profound that it is almost tangible. Esports is quickly gearing up to be the forerunner in that,” said Parth Chadha, founder, Ewar Games.