The report stated that interest rate hikes, tightened liquidity, inflation, changes in taxation, and concerns about an imminent recession are some of the reasons for the dip in investments in the online gaming segment.
As per the report, the segment has attracted funding of ₹22,931 crore from both domestic and global investors between FY20 and FY24 YTD. The funding in the segment, which has 1,400 start-ups, is even lower than the ₹921 crore raised by online gaming companies in FY20.
In FY23, the online gaming segment attracted a mere ₹796 crore. The fundraising stood at ₹7,639 crore in FY21.
The number of deals in the segment has dropped significantly from 72 in FY22 to 15 in FY24 YTD. In FY23, the segment witnessed a mere 33 funding deals being closed.
The Indian Real Money Gaming (RMG) companies have attracted ₹19,897 crore in funding between FY19 and FY24 YTD.While noting that the last two-three years have seen the inception of numerous gaming start-ups, the rise of three gaming unicorns, more than six strategic exits, and a successful IPO, the report added that the ongoing year has been a challenging one for the online gaming segment.Notwithstanding the challenges, the report projects the Indian online gaming segment to grow at a CAGR of 15% to touch a value of ₹33,243 crore in FY28 from ₹16,428 crore in FY23. The report noted that the contribution of RMG platforms to the overall online gaming segment market size is expected to shrink to 75.4% in FY28 from 82.8% currently due to the recent GST amendments and accompanying notices.
On the other hand, the contribution of non-RMG and esports platforms to the overall online gaming segment is expected to grow from 17% in FY24 to 25% in FY28.