Mobile gamers up spending on games

Mobile game developers in India are finally being able to address one of their key concerns about the Indian market. Since the pandemic, India has offered a vast market for mobile gaming, with user sign-ups growing rapidly. However, mobile gamers in the country weren’t easy to monetize as most would prefer free services on their phones.

According to data obtained from app analytics firm, data.ai (formerly AppAnnie), Indians spent $179.8 million on in-app purchases on gaming apps on the Google Play Store and Apple App Store between November 2021 and October 2022 alone, which is a slight increase from the $171.8 million in the year ago period. The total number of game downloads for paid games also grew from 5.62 million to 5.83 million in the same period.

Another report, published last week by gaming focused venture firm Lumikai, said that 120 million of the 507 million gamers in India are paying for games now. The report said that the market added around 2 million paying users in FY22, while the average revenue per paying user grew by 11% to $20 per year. In essence, not only the volume of paid gamers, but also the amount they’re paying has grown.

The real money gaming (RMG) segment accounted for 57% of the gaming revenue in FY22, but the good news for game developers is that revenue from in-app purchases is expected to grow at a 34% compound annual growth rate (CAGR) from FY22 to FY27. RMG has long been seen as the only real revenue generating segment in the Indian mobile gaming market, but Lumikai’s report noted that this segment is expected to grow at 25%.

A case in point is cricket strategy game Hitwicket, which had a conversion rate (the number of gamers who would pay after downloading the game) of 1% till last year.

“This year we are seeing the conversion rate grow to 4%. It is a massive jump in people’s propensity to pay. In mature markets such as the US, UK, and Australia the conversion rate is 7-8%. The gap is bridging between India and tier 1 gaming markets,” said Keerti Singh, co-founder of Hitwicket. She attributed the increase to the inclusion of easy payment mechanisms like unified payment interface (UPI) in the Play Store, microtransactions, and improving the learning curve among gamers.

India still lags well behind developed markets like the US or EU in terms of paid content for games. Rajan Navani, founder and chief executive of JetSynthesys, an Indian game publisher, noted that in more mature gaming markets paying for games has been a trend for decades. “While we have grown significantly through the pandemic, there is still a difference in magnitude. However, the catch-up potential of Indian gamers is huge,” added Navani. 

The move has spurred gaming firms to build products around this newfound ability to monetize gamers too. “Battle passes, subscriptions, sachet pricing, gacha mechanics (players spend money to win random items) are some of the monetization mechanics that are working for gaming companies,” said Justin Shriram Keeling, founding general partner at Lumikai. 

Further, Nitin Goel, country manager, Indian subcontinent for French game publisher Gameloft, which makes games like Asphalt, said that most companies are focusing on how they can offer more engaging content suited to Indian audiences and priced for the market.

Navani added that Indian gamers are also stepping up spending on subscriptions, where certain content is made available to gamers early on in their journey.

“The propensity for increased spending on subscriptions, in-game items, downloadable content, expansion packs, and more has evolved drastically. Players are more willing to spend for in-app purchases and are open to transactions as this gives them immersive gameplay and story experience, and access all the in-game content,” said Sean Hyunil Sohn, chief executive of KRAFTON India the company behind successful games like Battlegrounds Mobile India (BGMI).