Game theory: How fortunes of India's gaming industry turned from being a sunrise sector

economictimes.indiatimes.com:

Candy Crush or Ludo King on our phones. In doing so, we helped the gaming industry go from something nifty to kill time with to a $3-billion omnipresent behemoth. In fact, it’s pegged to reach $7.5 billion worldwide in the next five years.
In India, the sector has strengthened its roots with 568 million gamers, many of whom also participated in the 2022 Asian Games, where esports made its official debut.

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The numbers are impressive, but the industry finds itself at the crossroads today. Real money gaming (RMG), which contributes 60% of the revenue, is embroiled in policy debates which equate it to ‘betting’ or ‘gambling’. This year, the GST department hiked the tax liability on RMG deposits to 28%, plus a 30% TDS on winnings. The impact? Decline in active user base, startups running out of capital, massive consolidation, and RMG companies diversifying overseas.
Venture fund Lumikai has already cut its growth forecast for the RMG segment to five per cent over next five years, down from 25 per cent previously, with its share in the overall market reducing to 32 per cent by the 2028 fiscal. And soon, others like Kalaari Capital and Niko Partners too are expected to follow suit.
Silver Lining

Despite the predictions of doom, however, investments in online gaming aren’t fading away just yet. Besides traditional VC funding, digital gaming in 2023 has also witnessed money flowing in from newer corners, like a Rs 410-crore investment from SBI Mutual Fund, the Rs 100 crore the Kamath