The mobile gaming sector in India will increase from $1.5bn in revenue in 2020 to $5bn by 2025, according to a new report from venture capital (VC) firm Sequoia and management consulting company BCG.

A total of 80% of the $1.5bn generated by mobile gaming last year came from in-app purchases and real-money game (RMG) spending, the report noted. There are now over 300 million gamers in the country, with revenue across all gaming devices having reached $1.8bn in 2020, a 500% increase from 2016.

China and the US remain bigger markets, but India’s gaming sector is growing faster at a compound annual growth rate (CAGR) of 38%.

“There’s also a strong correlation between sociability and spend,” said Prachi Pawar and Pushpak Kedia of Sequoia. “Close to half the gamers surveyed for this report play games to keep in touch with family and friends, and high engagement gamer archetypes tend to spend more across monetisation models. 

“These gamers tend to gravitate towards real money gaming, which is key.”

Investors are optimistic about gaming platforms in the country as they are able to mitigate the hits-driven nature of individual games. These platforms accounted for more than 88% of all VC funding in the sector last year, which amounted to over $400m.