3 minute read 28 Jun 2021
esports in India

The dawn of esports in India

By Ashish Pherwani

EY India Media & Entertainment Leader

EY India M&E sector leader with more than 20 years of experience, serving companies in all the M&E sub-sectors. A mentor and coach to teams.

3 minute read 28 Jun 2021

Our latest report delves into the manifestations of esports and factors that determine its future potential.

A new kind of sport - esports is on the rise in India and it is not the same as online gaming. Esports is a sport, requiring competitive game play, a tournament or league format and use of skill, most often physical skill. It has gained popularity with youth, consequently, has become an attractive option for brands.

Esports in India 2021

As the popularity and frequency of esports tournaments grow, esports is often confused with online gaming. The need for an electronic device and online multiplayer game fuels the misnomer. However, esports is not online gaming. Unlike online gaming, esports is defined by online games of skill that are played in tournaments – different teams and individuals playing against each other to win the championship, league, title like physical sports. Esports also includes games which are the digital/virtual manifestations of traditional sports.

Esports is more versatile and adaptable than regular sports, and its tournaments vary in scale, operations and frequency

Furthermore, esports is indistinguishable from traditional sports. In esports, games are monitored; and participants are actively playing and using their skills to win the championship. Like traditional sports, excelling at esports requires hand-eye coordination, attention, visual processing, executive function and strategy development. All of that perfectly combined with well-timed responses to game stimuli helps players excel and grow in the space.

As a sport, it has steadily gained popularity with youth, and consequently has become an attractive option for brands to connect with young and empowered audiences.  As a game of skill accessible indoors and on the ubiquitous mobile phone, it gained much popularity during the lockdowns witnessed in 2020 and 2021.  And as a mode of entertainment, it continues to serve hard core gamers as well as social gamers who wish to get competitive.

Future of esports in India

Though at a nascent stage, the esports market size in India has quickly scaled to INR3 billion in FY2021 and we expect it to reach INR11 billion by FY2025.  However, the sport has a much larger economic impact: we expect it to generate economic value of around INR100 billion between now and FY2025.

The growth of esports in India has been spectacular. As a game of skill accessible indoors and on the ubiquitous mobile phone it has gained popularity during the lockdowns witnessed in 2020 and 2021. Consequently, it has become an attractive option for brands to connect with young and empowered audiences.
Ashish Pherwani
EY India Media & Entertainment Leader

1.5 million players, 85 million viewers, 20+ broadcasters and several brands, organizers and publishers will collectively define the esports market in India by FY2025. Presently, about 4% of mobile games on the Play Store are from Indian publishers. As Indian game developers transition from developing social games to multiplayer games, Indian developers are expected to create games that are better suited for esports tournaments.  The number of Indian gaming studios have grown 5x since 2015. There are over 14 esports broadcast platforms in 2021 which are expected to cross 20 platforms by 2025.  While current viewership is 17 million, over 85 million unique viewers will watch esports tournaments in the country by 2025.

The esports industry is expected to grow at 46% CAGR over the next four years and streaming platforms will generate the largest chunk of esport revenues.

As esports grows popular amongst youth and the affluent, advertisers and agencies are expected to increasingly use esports tournament viewership to gain reach and engagement with the audience, growing over 4x to INR6.5 billion by FY25. Eventually, the industry could explore subscription revenue models.

Tournament sponsorship and syndication revenue would likely quadruple to more than INR3.5 billion CAGR growing at a CAGR of 45%. Media broadcasting rights and advertisement sponsorship revenue together constitute this segment.

The prize money or prize pool would likely contribute to about 10% to the esports economy FY 2025 and reach an estimated INR1 billion esports market size India by FY2025.  About 85% of the prize money will be for mobile esports tournaments.

The industry, however, faces regulatory challenges and uncertainty such as misconception that esports is gambling or a game of chance and its consequent banning by certain states. Additionally, lack of an industry nodal body, regulatory clarity and multiple ministries adds to it woes.

Summary

As esports grows popular amongst youth and the affluent, advertisers and agencies are expected to increasingly use esports tournament viewership to gain reach and engagement with the audience, growing over 4x to INR6.5 billion by FY25. Eventually, the industry could explore subscription revenue models.

About this article

By Ashish Pherwani

EY India Media & Entertainment Leader

EY India M&E sector leader with more than 20 years of experience, serving companies in all the M&E sub-sectors. A mentor and coach to teams.