The last decade saw the meteoric rise of the retail e-commerce space which today generates over $20 billion annually. The gaming space, relatively speaking, is a dwarf that is on track to generate $250 million in revenues this year. But demographics is destiny, and the next decade will belong to the gaming industry. Propelled by a massive demographic tailwind, the gaming industry in India will become a major part of the entertainment industry, second only to Bollywood. By as early as 2020-21 most forecasters see the industry generating $1 billion in revenues. Compare that to the roughly $3 billion in revenues that Bollywood generates today, and one can see how this vision for the Indian gaming industry is not a pipe dream.
How would demographics drive this growth and why would Indians give more and more of their time and disposable income to gaming as a form of entertainment? Trivikraman Thampy - Co-founder and Co-CEO of Play Games24x7, believes that it is first important to understand the role mobile games have played and will play in the life of an online Indian consumer. Games, like any other form of entertainment, are not a need. When it comes to wallet share, people are bound to first address their needs and then use any remaining disposable income to indulge in whatever suits their fancy. This is where demographics come in.
50 per cent of India's population and 60 per cent of India's gamers are under the age of 25. This is a remarkable statistic when you consider that the entire social gaming industry in the US in its early stages was driven by middle-aged women with plenty of disposable time and income. And disposable income is what the under 25s in India lack. At Play Games24x7, which is today India's largest gaming business, we have carefully studied how demographics map to engagement and monetization. And what we have seen consistently, irrespective of the game, is that while the under 25 players show incredible engagement levels, 95 per cent of revenue is generated by players over 25. And this essentially is the demographic tailwind.
Over the next decade, 190 million Indians will come of gaming age. They will cross the age barrier of 25 and finally have sufficient disposable income to spend on games. This is also a generation that is more open to experimenting and comes with no predefined notions of entertainment. A classic case is the youth in the US where a 15-year-old now spends an incredible 60 minutes a day playing games. Something like this wasn't true even as little as a decade ago, but now entertainment is shifting from passive (watching TV for instance) to active (playing games and engaging with people or even a system).
While demographics is destiny, it would be unwise to take this growth for granted. If active engagement is what the next generation wants, game developers are going to have to get creative in doing that. Pokémon Go is a case in point, but we are going to need that kind of innovation on an ongoing basis. Can we as game developers deliver more immersive experiences where the virtual world comes closer and closer to the real world? I can't physically play rummy with my friend from Delhi while sitting in Mumbai but can I be made to feel that I am actually sitting across him and playing? How could any other form of entertainment compete with such an immersive experience which would be a paradigm shift in what we understand today as social gaming? And it is this intersection between innovation to deliver more immersive gaming experiences and the inevitable massive demographic tailwind that is going to drive exponential growth in the gaming space in the next decade.
