In recent times, India’s gaming industry has been in the spotlight for both positive and negative reasons. While a significant setback came in the form of the imposition of a 28% GST on online games during the 50th Council meeting held in July, there’s a growing wave of optimism among industry insiders, and Zerodha co-founder Nikhil Kamath is at the forefront of this movement. Kamath’s recent endorsement of the gaming industry as the ‘next big thing’ for India has ignited discussions about the potential and growth of the sector.
The Imposition of GST and a Resilient Industry:
The gaming community in India took a hit when a team of politicians and experts decided to levy a hefty 28% GST on online games during the July Council meeting. This decision sent ripples through the industry, sparking concerns about the potential implications for gamers and businesses alike. With the gaming sector being one of the few thriving avenues in the aftermath of the pandemic, such taxation raised valid concerns about its growth and sustainability.
Nikhil Kamath’s Vision On Esports and Insight:
Amidst the looming concerns over the GST imposition, Nikhil Kamath’s perspective brings a refreshing outlook to the table. In a tweet, Kamath, who is well-known as a co-founder of Zerodha, a prominent stock brokerage platform, highlighted the enormous potential of the gaming industry. He cited data to support his claim that the gaming industry’s worth is now double that of the combined movie and music industries. Kamath further emphasized that the younger generation appears to be less captivated by cricket, a shift from the trends observed in his own generation.
Thriving Statistics and Projections:
Kamath’s assertions are backed by a series of compelling statistics. He noted that in the Fiscal year 2021-22, Indian gamers contributed to 17% of global game downloads. This figure is not only indicative of the country’s growing gaming culture but also reflects the substantial engagement of Indian players in the digital gaming space. Additionally, he mentioned that the average Indian gamer spends around ₹1,700 on online games, revealing a considerable investment in the industry.
Moreover, Kamath drew attention to data from Venture Intelligence, projecting a robust 27% annual growth rate for the Indian gaming market, aiming to reach an impressive $8.6 billion by FY2027. This growth trajectory, if realized, could catapult India to the forefront of the global gaming industry.
The Rising Stars: Unicorns and Job Creation:
Kamath didn’t stop at presenting the potential economic impact of the gaming sector; he also delved into its job creation prospects. The Indian gaming industry presently employs around 150,000 individuals, out of which 30% are developers and programmers. He shared that game producers earn an average salary of ₹10 LPA, while game designers make an average of ₹6.5 LPA. According to Kamath’s insight, the next big game-changer for India is esports, a domain that he believes will contribute around ₹100 billion of economic value by 2025.
Esports on the Rise:
Comparing the esports industry to the immensely popular Indian Premier League (IPL), Kamath referenced data from Sportkeeda to predict that the esports prize pool is poised to outgrow that of the IPL by FY2025. This insight hints at the burgeoning potential of esports and its growing appeal among both players and spectators.
Challenges and Advocacy:
Kamath’s optimistic view on the gaming industry’s future is not without challenges. The Online Gamers’ Association has raised concerns about the high GST rate, asserting that it could lead to the rise of illegal gaming operations. Gamers from Tier II and Tier III cities have united under the ‘Indian Gamers United’ banner, expressing worries that excessive taxation might push players toward unregulated offshore platforms.
Furthermore, the association is advocating for a distinction between games of chance, such as gambling, and games of skill, like gaming. This differentiation is crucial for ensuring a fair and balanced approach to regulation in the industry.
Nikhil Kamath’s backing of India’s gaming industry brings much-needed optimism to a sector grappling with challenges. Despite the setback caused by the imposition of GST, Kamath’s insights paint a picture of a resilient industry that holds significant potential. The numbers, projections, and discussions surrounding the gaming sector underscore its growing relevance in India’s economic landscape, suggesting that indeed, esports and gaming could be the next big thing for the nation. As the industry evolves, policymakers must collaborate with industry stakeholders to strike a balance between taxation and fostering its growth.
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