Online gaming the bright spot in technology, media & telecom sector

25 January 2021 Consultancy.in 4 min. read
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India’s online gaming market could more than double in value to nearly $3 billion by 2022 – a highlight from Deloitte’s latest technology, media and telecom (TMT) predictions.

Five years of change has been condensed into nine months due to the pandemic, is one of the key conclusions of Deloitte’s report. The rapid acceleration of digital uptake has been visible across multiple parts of the TMT ecosystem in India, mirroring similar global developments, noted PN Sudarshan, Deloite’s India TMT leader.

The report highlights how Covid-19 has been a catalyst for digital activity – among consumers and businesses alike. The latter moved their entire operations online almost overnight when Covid-19 hit, and have since explore unchartered territory when it comes to digitalisation and business-enabling technology.

Wireless data consumption - Smartphone users in India

Industry 4.0 fields such as cloud adoption and data analytics have raced forward by years if not decades according to Deloitte’s report, feeding the two-pronged objective of business continuity in the near term and positioning for the new normal in the long term. Underlying all this change is a radical shift in consumer behaviour. 

Online usage in India was already on a steep climb in recent years, with the average data usage per person jumping from around 3GB in 2018 to nearly 10 GB in 2019. Data usage was jumping on the back of a widespread increase in online access. In 2020, average data usage jumped past the 12 GB mark, fueled by lockdown and a reliance on technology.

Basic necessities have moved online this year. On the back of infection risks in hospital, eHealth in India touched $11 billion in market value this year, with expectations of $16 billion by 2025. In July, the government launched the National Education Policy (NEP) 2020 – opening the door to thousands of online learning platforms. Food and grocery purchases have moved further into the online space as well.

Online gaming boom

Necessities aside, Deloitte focused on the TMT sector, and the headline from this segment is growth in online gaming. Indeed, gaming was already on the rise before the pandemic. By 2019, the segment had crossed the $1 billion mark – with 85% of gaming take place on mobile. The pandemic has put this growth into supersonic mode, and the report highlights some of the driving factors.

Indian gaming market - Number of online gamers in India

For one, recreational activities such as concerts, cinemas and stadiums are out of the picture. Topping this off, television and online streaming platforms were restricted in their ability to make new content – at least in the first few months of lockdown. Gaming was a last resort, and the result is a 20% plus boost in time spent on online gaming in India – touching a customer base of 300 million.

Per the report, these factors could combine to drive online gaming at a compound annual growth rate (CAGR) of 40% till 2022, more than doubling its value to $2.8 billion. Currently holding around 5% of India’s media & entertainment sector, online gaming could occupy up to 10% in the next two years alone.

And its not just quantitative growth. Gaming is seeing more sophisticated business models, diversified revenue streams and tech savvy consumers – all of which are likely to attract foreign investment to the sector. The fundamentals are strong, and its remains to be seen how the industry fares in the coming years.

“Some of the pandemic-infused momentum may gradually taper as that happens with most industries. However, the gaming sector has healthy growth factors and indicators that would take it to the next level,” concluded the report.