The Evolving Landscape of Sports Gaming in India
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The evolving landscape of sports gaming in India March 2019 KPMG.com/in Table of contents The fantasy sports market in India 05 Understanding the An overview of fantasy sports online gaming consumer in India 01 13 Sports betting in India 21 The e-sports market in India 31 01 An overview of online gaming in India The evolving landscape of sports gaming in India 02 The online gaming market in India has seen in online gaming activity driven by the growth tremendous growth of late, driven, in part, by the in the number of gamers by nearly ten times over surge in digital usage. The revenues have nearly 2010-2018, also led to similar growth in game doubled over a period of four years, reaching developing companies over the same period. INR43.8 billion in FY18 and are expected to grow The proliferation of affordable smartphones, further at a CAGR of 22.1 per cent from FY18-23, high-speed internet and falling data prices are expected to reach INR118.8 billion.01 The increase the primary catalysts for this rapid growth. Online gaming industry revenue* Share of revenues in online gaming (INR Bn) 118.8 Others 11% 43.8 2017 Mobile games 20.3 89% FY14 FY18 FY23 Source: ‘Media ecosystems - The walls fall down’, KPMG in India, 2018 Source: Newzoo Consumer Insights02 *Note: Revenue category - Mobile gaming, PC and consoles (excluding sales of physical video games) and browser based games Number of gamers Number of game in India03 (Mn) developing companies in India04 20 250 25 250 2010 2018 2010 2018 Source: From rummy to e-sports, its Source: How digital gaming in India is boom time for digital gaming in India, growing up into a billion-dollar market, Techcircle, November 2018; accessed Forbes, March 2018; accessed on on 6 February 2019 11 February 2019 01. Media Ecosystems: The walls fall down, KPMG in India’s Media and Entertainment 03. From rummy to e-sports, its boom time for digital gaming in India, Techcircle, November Report, 2018 2018; accessed on 6 February, 2019 02. The India opportunity: tapping into one-tenth of the world’s gamers, Newzoo, April 2018; 04. How digital gaming in India is growing up into a billion-dollar market, Forbes, March 2018; accessed on 7 February, 2019 accessed on 11 February, 2019 © 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved 03 In terms of popular gaming genres, puzzle, action and adventure are the most consumed among casual and heavy gamers. Also, mobile phones are the most preferred device amongst online gamers owing to the flexibility they offer in terms of the potential ‘anytime, anywhere’ usage. Top mobile game genres Device preference 54% Tablets 49% 4% PC/Laptop 40% 37% 37% 34% 11% 31% 30% 26% 23% 22% 18% Mobile 85% Puzzle Action Adventure Arcade Racing Sports Heavy Casual Source: Online gaming in India: Reaching a new pinnacle, Study by KPMG India and Google, May 2017 © 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The evolving landscape of sports gaming in India 04 The three key segments of online gaming are – real money games (RMG), mobile-centric/casual games and e-sports. Within the RMG genre, the further sub classifications include rummy, poker, daily fantasy sports and quizzing. Real Money Daily Fantasy, Games Rummy, Poker, (RMG) Quizzing, etc This report delves deeper into two segments of online gaming: e-sports and particularly fantasy sports. We discuss the Mobile Candy crush, Online centric/ market for e-sports in India Subway surfers, gaming casual and the growth drivers Temple run, etc. gaming and challenges, while for fantasy sports, we aim to understand the dynamics behind engagement of users with fantasy sports platforms, as well as to Counterstrike, e-Sports understand how fantasy FIFA, PUBG, etc. sports is vastly different from sports betting. © 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved 05 The fantasy sports market in India The evolving landscape of sports gaming in India 06 Fantasy sports - market overview Online fantasy sports gaming (OFSG) is a form of Users can play in ‘practice contests’ that are free skill-based online sports gaming where sports fans to join, or in ‘cash contests’ requiring an entry fee can create their own team made up of real-life players and which offer monetary returns. Fantasy sports from upcoming matches and is widely played across has witnessed a rapid evolution from a great fan cricket, football, kabaddi, basketball and other popular engagement tool to a major segment of the online sports games. These virtual teams garner points sports gaming universe in India. based on the actual statistical performance of players during the course of the real life match and winners are determined accordingly. The Punjab and Haryana High Fantasy sports users in India (Mn) 100 Court has ruled positively on Dream11’s fantasy sports game which follows the below format: a. Participants have to choose a team consisting of the same number of players as the real-life sports 50+ team (e.g. five in basketball, seven in kabaddi and eleven in cricket/football) 20 2 b. The fantasy sports team needs to have a mix of players from both the participating real-life June December February 2020E sports teams 2016 2017 2019 c. All fantasy sports contests should run for at least Source: Fantasy sports to have 100 million users in India by 2019, the journey has just begun, Financial Express, June 2018; accessed on 1 February 2019 the duration of one full sports match Some of the key reasons for this rapid adoption of d. No team changes are allowed by participants after fantasy sports include: the start of the sports match. The fantasy sports landscape in India has witnessed a Emergence of sports leagues significant transformation since its launch nearly two The advent of multiple sporting leagues in India over decades ago. ESPN-Star Sports launched its ‘Super the last few years (e.g. football, kabaddi, badminton, Selector fantasy game’ in 2001, which was amongst basketball and volleyball) has increased opportunities the earliest fantasy games in the country to gain user for users to engage in fantasy sports. While the traction. The format of the game involved people Indian Premier League (IPL) remains the prime sports registering their teams for free, with contest duration property in India, both from a sporting as well as a ranging from a month to a specific series. Over the fantasy sports point of view, the emergence of these years, other popular tournaments such as English new leagues ensures that users can engage with Premier League, UEFA Champions League, ICC multiple sports throughout the year. The regional/ events, and IPL, developed games where people could geography based team structures of most of the manage their teams for specific tournaments. new leagues, coupled with the presence of national and international stars, ensures a keen following of In the last 2-3 years, OFSG in India has witnessed these leagues on fantasy sports platforms as well. stupendous growth. The number of fantasy sports Some of these new popular sports leagues launched operators has increased by seven times (~7x) over in India are: 2016-2018, whereas the number of users has grown by over twenty five times (~25x) from June 2016 Year of to Feb 2019.01 A majority of the League Sport incorporation Fantasy sports fantasy sports platforms offer a Indian Super League Football 2014 operators in single-match ‘Free to play’ or ‘Pay India (Nos.) to Play’ model of daily fantasy Pro Kabaddi League Kabaddi 2014 sports. The daily fantasy Pro Wrestling League Wrestling 2015 10 70 sports format is highly sticky Hockey India League Hockey 2013 and offers sports fans a Pro Volleyball League Volleyball 2019 2016 2018 meaningful way to engage Source: Fantasy sports deeper with their Source: KPMG in India analysis, 2019 to have 100 million users in India by 2019, the favourite sports. 01. Fantasy sports to have 100 million users in India by 2019, the journey has just begun, journey has just begun, Financial Express, June 2018; accessed on 1 February, 2019 Financial Express, June 2018; accessed on 1 February 2019 © 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved 07 Growth in digital infrastructure Increased investor interest Over the last two years, the number of internet The rapid growth of fantasy sports in India has been subscribers has grown from 368 million in well supported by continued investor interest in September 2016 to 560 million in September 2018, some of the leading players in the market. Some of which 86 per cent were broadband subscribers. of the recent key investments in the fantasy sports Also, during the same period, average data usage segment are outlined below. Also, others players per subscriber increased significantly due to the like DailyFantasy Cricket and CricNWin have raised availability of affordable smartphones/smart feature funding of less than USD4 million.02 phones coupled with rapidly falling data costs. This growth in digital infrastructure has led to the availability of high speed internet in the hands of Year Player Deal the Indian masses, helping drive growth in fantasy sports.