Online games that deal in real money have been on the rise in the last half-decade in India, with over 400 startups having entered the sector in this short period of time. However, since last year the industry overall has been facing multiple hardships.
While one of the primary roadblocks that have arisen in the path to success for real money gaming companies is the new GST laws, there are also other factors that are playing a major role. India is seeing a major change in the way online sports is looked at. As per analysts, Esports, aka competitive video gaming, is set to take the place of ‘real money gaming’ in times to come.
Added to these two factors is also the aspect that most of the real money gaming and online gambling startups in India have various show cause notices issued on them by the government. With all these factors in mind, analysts are now claiming that the sector will be in ruins in the foreseeable future.
GST Laws a Major Challenge
Between FY2020 to 2023, the real money gaming sector witnessed a rise of almost 30% CAGR. But now, with 28% GST levied upon the payouts from these games, a major chunk of the players are quitting games such as rummy and fantasy sports.
Not only are the startups having to charge a greater sign-up fee, but the prize pool money has also fallen to half of what it used to be earlier. While some of them are claiming that new GST laws are unclear in nature, even further clarity is unlikely to revive the massive fall in players that the entire segment is now facing.
Consumers Moving to Other Sectors
Esports, a brand new sector that is now growing in the country, has a major opportunity to gain here. Games such as FIFA are already part of the prestigious Asian Games, and while these games are not yet directly monetized, they will eventually walk the path of real money gaming. So, the players who are already seasoned in the industry are highly likely to enter the sector.
Fantasy sports is an integral part of Esports in many countries worldwide, and once the Esports industry grows in India, it will also become so here at home. While games such as rummy or other card games will not find a place in this sector, many others will, and this will become a point of contention for real money gaming overall.
The Fall is Inevitable
Certain startups in the real-money gaming sector, such as PlayGames24x7, have become wildly popular, amassing over 50 million users. While these larger players are likely to weather the oncoming storm, smaller startups may struggle to withstand the impact of GST laws and the competitive landscape posed by esports. Unless a significant change occurs soon, the real-money gaming sector could be a short-lived boom in the Indian online gaming industry.
Manager Research & Editor, Industry Media Solution Group – CyberMedia Research