Some notes on Real Money Gaming (RMG) in India

The gaming industry in India has been growing exponentially in recent years, with many people joining the ranks of avid and serious players. India has now become one of the leading countries in the world in terms of gaming, and this is largely due to the large population, the availability of technology, and the increasing enthusiasm and accessibility of gaming platforms. With more and more people playing games, India has become a massive and vibrant gaming community, with people of all ages and backgrounds enjoying the many styles and genres of gaming. From console and PC gaming, to mobile and online gaming, there is something for everyone to enjoy in India’s gaming scene. This post mostly focusses on the real money gaming market, potential profit pool and if somebody is starting a RMG company in India - this document can serve as a preliminary primer in understanding the market.

High level Index:

  1. Why bother building in India in the first place?
  2. What is the current market scenario in India?
    • How is the entire gaming industry revenue split?
    • Where is majority of the revenue and profit potential?
    • Which sub vertical is growing?
      • What are users majorly playing?
  3. Where is the market opportunity?
    • Differentiator for RMG companies starting today and path forward for building a RMG business

1. Why India?

Bull case for gaming in India

Bull case for building outside India?

2. Indian Gaming Market

Revenue Split

RMG dominates the market account for about 55-60% of the overall revenue. While casual games attract the largest number of users and have been crucial in growing the mobile gaming culture in India, while real money gaming attracts the highest paying users in mobile gaming. As a result, real money games have been the largest revenue source for India’s gaming sector. This segment is expected to grow at 30% CAGR with growing expectation of regulatory clarity.

RMG vs Non-RMG

Online RMG market is segmented into 3 game types (Online Rummy, Poker & Fantasy Sports) and by platforms into Single game (>91%) & Multi game (~9%) - collectively growing at a CAGR of ~61% for the last 3 years. Online Real Money Gaming Market split by the following segments :

Rummy is currently the largest segment and is expected to dominate the RMG market in the future due to rising number of new rummy users from north India and increasing propensity to pay of existing users. Rummy market is expected to increase from $1Bn in FY2022 to $2.4Bn-$2.5Bn in FY2026 at CAGR of 24%.

Poker has the least penetration when compared to rummy and fantasy, indicating a very high potential for growth in the coming years. Poker has the highest user retention rate and highest revenue per user among the two games considered here. Poker market is expected to grow from $150Mn in FY2022 to $450Mn in FY2026.

Inside Non-RMG, where is the money coming from?

Lets now move on how the users are split between RMG vs Non-RMG. The Non-RMG market has two major categories in terms of game types - Casual and Hyper-casual, and core games. Casual and Hyper casual games offer a quick and easy means to pass time and have become a popular entry point for India’s first-time mobile gamers. As a result, this segment has the highest number of overall users, i.e. 350-420 Mn, with very low paid user conversion rate (8-10%). Also, there are around 150-160 Mn core game users with very high conversion of paid gamers (36-43%)

RMG witnesses a MACU of 12-13 Mn of the total 26-30 Mn real money gamers and it is expected to reach 60- 80 Mn real money gamers in the upcoming years.

Everything else like e-sports, desktop, platforms are rounding off errors at the moment. E-sports grew about 5x on a small base but has plateaued since.

Multi Gaming vs Single Gaming platforms

While Single Game Platforms (SGP) currently dominate the market with (~90%) market share; the upcoming format of Multi-game platforms (MGP) may get popular in the future. MGPs offer a wider variety of games to users; and are therefore able to attract gamers from a wider set of interests and abilities. It should conceptually also be able retain them more by keeping them entertained and engaged for a longer time due to the wide array of game offerings (in reality however, this is harder than it looks).

The recent rise of MGP can be attributed to greater game types attracting wider variety of audiences(thereby increasing reach), distributed game dev costs and ability to capitalize on cross game synergies. In its current state, MGP is growing at ~40%; which is the highest across various segments of RMG; and is expected to be ~12% of the market by 2026. While, the relative share appears low, in absolute terms this translates to nearly $500Mn (viz. ~4x in 5 years) by 2026. This explains the observed interest amongst gaming companies to explore and grow as Multi-gaming Platforms.

MGP’s have also really lowered customer acquisition costs by spreading it and averaging it between low CAC games like Fantasy/Ludo and high LTV games like Poker/Rummy etc. However, not all things with MGP’s are positive. Majority of the users still go to these app to play 1-2 games and don’t deviate beyond them. Habit forming for the rest of the games is still a hit or miss.

3. Some perspective on RMG/gaming and way forward

How are these RMG businesses differentiated?

RMG has more or less become a commodity business. Most products look the same and some companies even modify their GTM to match competitors in hopes of attracting users with a familiar platform and better deposit offers(like a vampire attack). Product innovation has been slow or non-existent in this industry for the last ten years. Adda52 from 2013 looks 90% same as today. Moreover, given the extremely low M12 retention rates, you have to keep acquiring users (spending money) every year as your platform churns through them - making this a treadmill business.

Core problems to solve for in RMG:

At the end of the day, majority of your revenue comes from power users who choose your platform primarily for player liquidity and product experience. Recreational users are attracted towards big offers and guarantees but churn out when they lose. Ensuring you can retain/re-acquire recreational users through strong data driven offers/loops and providing superior gaming experience to power users would lead to a sustainable RMG business in my opinion. However, having a great product by itself is not enough. Distribution is super critical and making sure you can acquire users for cheap makes or breaks a platform. Cross game analytics/anti fraud/rewards (which is by large forgotten by most companies) is paramount to predict and minimize churn.

Revenue comparison between some Indian and foreign betting companies shows the market potential for a mature player globally:


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