Business of online gaming: Examining monetisation strategies in the industry

financialexpress.com:

By Probhir Roy Chaudhary

The online gaming industry is a highly lucrative business in India, growing rapidly in the last decade amidst continued debate regarding the classification of ‘skill-based’ games, in the absence of comprehensive law governing the sector. Gaming companies in the country and their users have multiplied significantly over the years – and so has the revenue in the sector, with reports indicating that the industry will likely grow to $ 3.9 billion by 2025.

This has not gone unnoticed by the government, as evidenced by the hike of GST on online gaming to 28% of the entire contribution made by players from the former rate of 18% on the platform fee/revenue. Several gaming companies have received tax notices and have filed petitions against this decision, of which many are currently ongoing in the supreme court. This article explores the innovative monetisation strategies adopted by gaming companies as they navigate the evolving landscape of gaming law in India.

Monetisation models implemented by gaming companies appear to be based on a simple game plan: target players (ads), offer rewards (in-app points) and nudge them to ‘improve their experience’ (real money). While there may be a distinction between players engaged in real money games and free-to-play games in terms of age and customer retention, both formats rely on advertising for marketing (such as sponsoring Indian cricket team’s jerseys) and additional revenue generation (through in-game advertisements).

Larger catalogue of games

In a competitive market, most gaming companies aim to offer as many games as possible on their platforms – both real money and casual games.

For example, fantasy cricket is a crowd favourite for Indian gamers owing to