Esports has become an attractive vertical for brands to reach out to a large number of audiences. Additionally it is a medal sport today and has been recognised by countries like the USA, China, Germany, South Korea and Sri Lanka as sports and India is on the rise. Esports experts believe that the Indian esports industry has quickly scaled to Rs 3 billion in FY2021 and is expected to reach Rs 11 billion by FY2025. Ernst & Young June 2021 Report titled as “Esports in India” has captured various manifestations of esports and determined its future potential. The report stated that the industry is expected to grow at 46 per cent CAGR which is over four-fold, from Rs 2.5 billion in 2021 to Rs 11 billion by 2025.
EY India partner and M&E leader Ashish Pherwani stated as per Exchange4media, “Esports in India tells a great growth story. As a game of skill accessible indoors and on the ubiquitous mobile phone, it has gained popularity during the lockdowns witnessed in 2020 and 2021. Consequently, it has become an attractive option for brands to connect with young and empowered audiences.”
Here are the key highlights of the report
- Esports industry is expected to surpass the biggest sport franchise in India in terms of prize money by offering a total prize pool of Rs 1 billion by FY2025.
- IPL, an Indian sports league with the highest prize pool in the country, offered Rs 250 million in its prize pool for the tournament. Esports came second at Rs 150 million.
- Today, it is estimated that India has 150,000 players and around 60,000 teams. Over 90 per cent esports players participate in online mobile esports tournaments.
- As esports becomes a viable profession for the youth, the number of players playing esports is expected to reach 1.5 million by FY2025.
- Four per cent of mobile games on the Play Store are from Indian publishers. As Indian game developers transition from developing social games to multiplayer games, Indian developers are expected to create games that are better suited for esports tournaments. The number of Indian gaming studios have grown 5x since 2015.
- There are over 14 esports broadcast platforms in 2020 which are expected to cross 20 platforms by 2025. While current viewership is 17 million, over 85 million unique viewers will watch esports tournaments in the country by 2025. This will comprise around 10 per cent of global esports viewership. Viewership across multiple streaming platforms such as YouTube, Facebook, Twitch and other OTT platforms will collectively measure much higher.
- As esports tournaments grow more competitive, they draw more viewership and support from players and the audience. For instance, the PUBG Mobile World League 2020 East was the last big tournament of the Asian continent. The Hindi-language broadcast of the same attracted 449,000 peak viewers, which has been the highest record so far.
- Over 50 brands, including prominent national brands like Airtel, Bookmyshow.com, Flipkart, Monster Energy Drinks, Asus, Redbull and Yes Bank have forayed into the esports industry over the past few years. While it is still at a nascent stage, its constantly growing audience base makes esports a growing favourite amongst brands and advertisers.
- Streaming platforms will generate the largest chunk of esport revenues. As esports grows popular amongst youth and the affluent, advertisers and agencies are expected to increasingly use esports tournament viewership to gain reach and engagement with the audience, growing over by 4x which is Rs 6.5 billion by FY25. Eventually, the industry could explore subscription revenue models.
- Tournament sponsorship and syndication revenue would likely quadruple to more than Rs 3.5 billion CAGR growing at a CAGR of 45 per cent.
- The prize money/prize pool would likely contribute over 10 per cent to the esports economy and reach an estimated Rs 1 billion by FY2025. About 85 per cent of the prize money will be for mobile esports tournaments.
This growth in the industry will be driven by:
-Increased smartphone penetration in India – nearly one billion smartphones will be in use in the country by FY2025.
-Consequently, internet users would cross one billion, reaching over 80 per cent of India’s population by CY2025.
-Over 10 per cent of handsets sold in the country will have capabilities to support professional grade esports.
-Nearly 50 per cent of the Indian population, being younger than 24 years of age, will drive overall gaming growth.
-Digital India push by the Government is boosting less expensive made in India handsets and affordable broadband availability.
- Esports industry in India would generate an economic impact of Rs 100 billion between FY2021 and FY2025. Size of the Indian esports industry would grow over fourfold from Rs 2.5 billion to Rs 11 billion by FY2025.
- Esports received nearly Rs 13 billion investments in the past five years and would likely see another Rs 34 billion by FY2025.
- From 16 per cent of 150,000 players to nearly 30 per cent of 1.5 million esports players, esports is expected to grow popular amongst women. As women take centre-stage in physical sports globally, it is propelling more women to join all forms of sports, including esports. This trend will continue in the future.
- The esports industry will create over 11,000 direct and indirect jobs, including game development and events by FY2025. The esports industry also creates opportunities in the field of event management, ethical and legislative laws, game design, esports marketing and league management.
- Over Rs 600 million of ancillary revenue will be generated between FY2021 and FY2025. New income streams comprising licensing and merchandising, player salaries, event management income and other tertiary spending will become more significant in the coming years.
- Aggregate tax revenues generated by the Indian esports industry are expected to be Rs 23 billion between FY2021 and FY2025.
- With an overall increase in the industry revenues and ancillary industry revenues, tax revenues collected by the government are expected to grow at 33 per cent CAGR which is almost Rs 8 billion by FY2025.
Indian esports requires Government support to achieve its potential. The Government of India, as well as the state governments, can help the industry become a world leader by introducing certain changes. Countries such USA, China, Germany, South Korea and Sri Lanka have realised the impact of esports on the economy and have recognised esports as a professional sport and have structured a frameworks which has helped to boost the ecosystem.
With the popularity of esports, brands interest, new investment and so on, it is expected that with the aid of Indian government, the esports sector has the potential to scale higher at a global level.