Ready Player One: Esports is India’s sunrise sector, set to become a Rs 1,100 crore industry by 2025

Last year, the Indian government officially recognised Esports as a sport, placing it on an equal footing with other mainstream sports like cricket and football. Unlike casual gaming on mobile devices, consoles, and PCs, Esports involves competitive athletes playing games like Counter-Strike, Fortnite, and Valorant as individuals or as part of a team.

Esports also debuted as an official medal sport at the Asian Games and as a pilot event at the Commonwealth Games. In fact, the Indian team created history by winning the bronze medal at the inaugural Commonwealth Esports Championships 2022 in Birmingham.

Fueled by the proliferation of smartphones and the broader availability of gaming laptops, affordable high-speed internet connectivity, as well as the pandemic-driven shift in entertainment patterns, the digital gaming industry is on an exponential growth path. According to an EY report, Esports, a subset of digital gaming, is driving that growth and is estimated to become a Rs 1,100 crore industry by 2025 at a CAGR of 46 per cent. Statista, in a recent report stated the number of users in the Esports market is expected to amount to 122.10m users by 2027.

The Esports Opportunity
Like classic sporting action, majority of revenues for Esports too is driven by audience monetization which is increasingly being aided by broadcast and streaming deals with OTT players and sports channels on TV. In India, our thriving sports management and broadcasting ecosystem along with rich content distribution networks are helping the growth of Esports, not just in the metros but in tier 2 and tier 3 towns and cities as well. The recruitment of Esports athletes, considerable cash prizes in tournaments, and lucrative sponsorship deals is also making it an aspirational career option for the youth.

The growing number of Esports players and the increasing audience interest is also creating new avenues for brands and turning out to be a minefield of opportunities that go beyond the players to almost every associated field inside out. Now, Esports is not just an indulgence for casual gamers and competitive athletes but is seeing extensive interest from viewers as well as driving significant growth for the sector. According to a paper published by Lumikai, India had the highest share of game downloads at 15 billion installs making up 17 per cent globally in FY22. Additionally, mid-core titles like Free Fire, BGMI and Genshin Impact saw strong daily engagement with over 80 minutes of average daily playtime per user. With more than 10 per cent of mid-core gamers playing for more than 10 hours per week. Leading brands and industry stakeholders are collaborating with Esports teams, platforms, and tournaments to ride on this wave.

The Next Wave
Quite evidently, Esports is a dominant enterprise already, and one that will continue to grow while nurturing other allied industries. According to the study by Lumikai Since 2021, India has seen 3 gaming unicorns, over 6 strategic exits, and 1 successful IPO. Indian gaming companies have raised $2.8 Bn from domestic and global investors in the last 5 years. Funding is up 380 per cent from 2019 and up 23 per cent from 2020.
The confluence of Esports with emerging technologies like 5G, AI, edge computing, mixed reality, et al could power the next evolution of Esports, and Intel will continue to play a key role in this evolution. Of course, like with other avenues and touchpoints of technology in recent times, AI is pegged to drive innovation in Esports across the board.

We’ve seen Esports analytics platforms like SenpAI provide AI-powered coaching for athletes assessing their records and suggesting optimal strategies to improve their odds of winning. AI and deep neural networks can uncover alternative ways of navigating games to aid gameplay as well as help improve game design to expand player engagement and drive interest. Additionally, machine learning can be used for customizing games based on user preferences and behaviours.

AI is also poised to play a significant role to help prevent fraudulent activities and identify potential risky betting behaviours. For example, Esports Technologies, a company that provides betting and wagering experiences for Esports, uses its AI platform to highlight and eliminate irregular betting behaviours and match-fixing.

AI not only drives player performance and discovery of new approaches to game theory and in-game strategies but is also reducing the resource requirements needed to develop gameplay as well as design virtual environments. Upcoming innovations in mixed reality experiences, virtual reality hardware, improved natural language interactions, and AI-driven analytics will blur the boundaries between sports, tech, and entertainment even further. However, the data-driven nature of Esports will also push the demand for advanced AI solutions and the computing required for that level of AI systems will drive the demand for sophisticated data centres.

The amalgamation of AI into Esports might seem to be trivial or good to have for recreational gamers but is invaluable to professional Esports athletes and elite gamers striving for tactical superiority and competitive edge.

Pushing for the Future Growth
Earlier this year, the Ministry of Youth Affairs and Sports included Esports in the category of “multisports events” while the Ministry of Electronics and Information Technology (MeitY) too added a section related to “matters relating to online gaming.” The formal recognition will be a massive stimulus to the growth of the Esports industry.

By the end of this year, the revenue in the Esports market in India – including revenue generated via sponsorship & advertising, merchandise & ticketing, streaming, media rights, and publisher fees – is projected to reach $28.81 million. The projected market volume is expected to grow to $46.23 million by 2027.
As a stakeholder in the Esports industry, we believe that a strong ecosystem with publishers, technology providers, streaming services, and audience monetization platforms will help drive the next stage of growth for the sector and enable Esports to emerge as an exciting alternative to mainstream sports and entertainment avenues for diverse audience segments.

With the right foundational elements in place and growth drivers on track, Esports will also generate a total economic impact of over Rs 100 billion through investments, direct industry revenues, in-app purchases, and other revenues creating more than 11,000 direct and indirect jobs by 2025 and become a major contributor to the Indian digital gaming industry.

The author is the Managing Director and Vice President of Sales Marketing & Communications Group at Intel India. Views expressed are personal.

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