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Gaming Startups: A New Wave in the Startup Ecosystem

The Indian gaming industry is booming. From USD 290 million in 2017, it is estimated to cross USD 1 billion by 2021. The Start-Up India Mission is an ambitious project of Government of India to provide a platform of nurturing and growing entrepreneurship and create enough job opportunities for the youth of the country. Today, although the startup scene in the nation is synonyms with the biggies of the fintech, taxi aggregators, and the e-commerce companies, games startups have ushered in growth and are showing the path to profitability.

The Growth of Mobile Gaming

In the last couple of years, the growth in the mobile gaming segment has been phenomenal. In the year 2017, India was one of the top 5 mobile gaming countries in the world. Thanks to growth in internet access; mobile gaming has taken off in a big way. Today, with the world’s largest Android user base, Indian mobile gaming is thriving. Some of the established ones have already made profits and have national and international VC firms exploring options of funding their businesses.

Homegrown Startups

As a small industry taking its genesis in early 2000, the startup scene during those days was all about a handful of 25 companies which made their head-start in the business. Over the years, with their focus on Indian audiences, they have successfully developed some of the favorite games with India specific content catering to this market. The result – some of the companies have provided profits to their investors over 200 times re-iterating the high growth potential of this industry. In fact, they have performed exceptionally well that they have been successful in getting VC funding for their businesses too.

‘Freemium’ Games

Riding on their success with India centric games; Indian gaming startups stuck gold with the ‘free-to-play’ or the ‘freemium’ options. The startups were successful in cashing on the growing demand for hugely popular free versions. Although the revenue per user is negligible, they are able to earn revenues through in-app advertisement and in-app purchases. With margins over 35%, they are being viewed as profitable cash-generating businesses from private equity funds to VC firms.

Legal Clarity

Another welcome development that has been responsible for the success of startups of online rummy as against poker is the legal clarity surrounding them. The Supreme Court verdict which declared rummy as a game of skill and playing online for stakes as legal has been hugely responsible in the increase in the number of online rummy gamers as against any other card game. Although there are a couple of hurdles that these startups are facing at the state level, the majority of the states have identified rummy as a legal game to play.

Localized Content

The gaming startups realized that the success story of China could not be implemented in India. The principal market drivers of growth were innovation and local content which emphasized made-in-India development initiatives. Hence, the success of online rummy was firmly cemented.

The future of Indian gaming startups is bright. As these companies focus on the scope and application of the emerging technologies like Artificial Intelligence, Augmented Reality, etc. the country is heading to become the world’s largest gaming hub in the future.

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