Insights from Gaming Blueprint: Blume Ventures

Introduction: The global games market is currently valued at $184 billion in revenue for 2023, with an anticipated increase to $205.4 billion by 2026. The distribution of revenue across platforms is as follows: mobile games account for 49.2%, PC games contribute 21.9%, and console games comprise 28.9% of the total market revenue. Total gamers worldwide are 3.3 Billion.?

By 2027, the Indian gaming market is projected to grow to US$ 8.6 billion, up from its current value of US$ 2.6 billion. Despite representing only approximately 1.5% of the global market by revenue, India boasts a substantial gaming community with 568 million gamers and 144 million paying users, 90% of whom play on mobile devices.

India has the 2nd largest gaming population with 9.5 billion gaming downloads alone in 2023 i.e. 15% of total world’s gaming downloads & ranks as #1 worldwide. The gaming population in India is segmented into two main categories: RMG (Card Games, Casual RMG, Sports based gaming) & Non-RMG (Adventure, Royal Battle, Puzzle, Arcade and Racing).?

Monetization: Free Fire, BGMI, CoinMaster, Clash of Clans are amongst the highest grossing apps in India generating $150mn+ in revenue through In App Purchases (IAP). While RMG games account for 60% of overall casual gaming revenues, in-app purchases are expected to grow at a 35% CAGR. Only 13% of India’s gaming revenue comes from non-RMG. Major monetization models are In App Advertising (IAA), In App Purchases (IAP), Subscriptions.?

Funding Landscape: The gaming sector saw a surge in funding in 2021, with global investments reaching $14.6 billion and Indian investments totaling $613 million. However, this was followed by a significant decline starting in 2023, with global funding dropping to $1.8 billion and Indian funding decreasing to $123 million. Notable cos in the Indian gaming industry - Dream 11, MPL, Nazara, Moonfrog, Rooter, Playsimple, Zupee etc.?

Understanding Game Development

Further, gamers are divided into three categories: Hyper Casual & Casual Gamers (Ludo King, Temple Run), Midcore Gamers (Clash of Clans, PubG), Hardcore Gamers (GTA, Fortnite). PubG has generated $47 Mn revenue from India in 2023 with 21 Mn Monthly Active Users (MAU).?

Game development has three core aspects -?

• Market research & development
• Test, Release, Distribute
• Engagement & Analysis?

Market Map?

Usually these games are distributed through Mobile, PC and Console.?

• Mobile: Average session typically ranges 5 minutes per day subject to game type. Requires 2-6 months to develop a game with investment of $50K-$300K.
• PC & Console:?Avg PC gamer spends 17-20 minutes per day and Console gamer spends more than 1 hour per day. Typically takes 1-5 years to develop a PC or Console game depending upon the game complexity. Most publishers spend anywhere between $500k- $3Mn.

E-sports is emerging as a game distribution & consumption channel. $1.3 Bn global market, clocked 532M viewers across games in 2022. The total prize money globally for eSports in 2022 was ~$240M, pitting it against popular sports.?

Popular tournaments - Valve's annual Dota 2 championship, Fortnite World Cup, World Cup in Saudi Arabia. Gaming accessories market is also quite growing & valued at $12B in 2024.?

Game Design’s Formula

To build a great game, we need to focus on five core fundamentals - Gameplay & Mechanics (Core loop, MetaGame), Genre (Battle, Arcade, Strategy, Puzzle etc.), Distribution (Platform & acquisition channel), Monetization Mechanics (IAPs, ads, subscription), Retention Mechanics (Unlocking new levels, Rewards).

Game Genres

• Hyper Casual Games: $36B global market opportunity by 2032. CAC tends to be around $0.1 whereas the LTV tends to be around $0.3, as the most common source of monetization is ads.?
• Casual Games: $26.5B global market opportunity by 2030. LTV of casual games tends to be 10x of hyper casual games. These games typically earn from microtransactions.
• Midcore Games: $4.8B global market opportunity, $0.4B in India. Games with Day 1 retention of higher than 40% at scale are poised to grow much faster and should generate >60% revenue from in-app purchases.
• Hardcore Games (AAA): $93.5B market size in 2023. AAA games are high-budget with development costs ranging $60M - $100M. FIFA is the highest grossing sports game franchise with $7.4 Bn revenue in 2023.?
• Real Money Gaming: Out of scope from report.

Kids Gaming Segment:?

• Gamified learning: $29.7B global market opportunity by 2026. Assist in early education, focusing on memory retention.?
• Metaverse gaming: $20.9B market in 2024. Sandbox games Minecraft, Roblox and Fortnite are quite popular among Gen-Z and Gen Alpha.?

Opportunity Areas

AI stack for game creation, analytics & liveops: The integration of AI in the gaming industry is poised to revolutionize game development and player experience. With the help of AI, developers will benefit from an efficient, and scalable game design process, utilizing tools like copilots and task automation to reduce costs and resource requirements. This democratizes game creation, allowing indie developers to compete with major studios by providing opportunities for players to create their own content, thus enhancing engagement and playtime. Additionally, AI-enabled analytics and live operations will enable developers to make informed decisions based on player behavior, optimizing game mechanics and monetization systems.

Report Authors:

Blume Ventures Marmik Mankodi Nachammai Savithiri R