Business of esports: Is India ready to invest in its potential?

India is emerging as one of the key players in the global esports markets. It wasn’t long ago when one would associate a packed stadium with a popular sport like cricket or hockey in this country and now, we have homegrown players ready to participate in the 2025 Olympics. Our nation is also the largest gaming market in the world, with a user base of 568 million gamers and over 9.5 billion gaming app downloads in 2023. Gone are the days of ‘all work and no play,’ as in esports, ‘all work and all play’ can make Olympic champions. More than 500 million people under the age of 35 are interested in the upcoming Olympics Esports Games in Saudi Arabia, as per the IOC.

Gaming is no longer a hobby but a multi-million dollar market that has captured the hearts and minds of millions of Indian youths. In 2023, the Indian esports market was valued at $40 million, with projections suggesting it could grow to $100 million by 2025. The Indian government’s recognition of esports as an official sport and Prime Minister Modi's Independence Day call for technological advancement and a massive gaming market, India is poised to become a global leader in esports and technology. As the industry grows, it offers exciting opportunities for gamers and entrepreneurs.

Few more years, we will be seeing this format becoming the norm and not an exception. As the industry continues to flourish, one needs to understand the key drivers of sustainable revenue streams. Having multiple revenue streams benefits new and old businesses alike.


Monetisation strategies in esports
There are various streams to generate revenue, with in-app purchases, subscription models, ad-based revenue sponsorship and merchandising being the top drivers of esports revenue.

In 2021, sponsorships alone were responsible for around 60% (roughly $641 million) of the global eSports revenue market share.

Digital platforms are ahead of the curve by facilitating content distribution and promoting on their platforms.

In 2023, merchandising alone generated over $100 million globally, with Indian teams benefiting from this trend. Media rights is a time tested method that accounted for nearly $300 million globally in 2023. Many Indian regional platforms and global sports networks have forayed this space making it highly competitive.

Targeted ads using real-time data and micropayments for the discerning customers is also a great way to build long-term engagements and add small but significant revenue.

Esports have exploded in popularity and along with it, a variety of revenue streams. Live events are not only a crucial source of revenue, they are a great tool in curating experiential engagements with fans and target user base. India has also witnessed global events like the BGIS 2023 garnering immense popularity. Major global tournaments like The International and the League of Legends World Championship, along with Indian events, attract large audiences and generate substantial income from tickets and merchandise. However, this mode does require high production and event costs.

We have also entered the age of mobile gamers as the Indian audience in Tier-2/3 cities are not only interested but are also realising the vast potential of esports. With a wide mobile user base, businesses can use a variety of monetisation strategies like battle passes, loot boxes and skins, especially in popular games like PUBG. Blockchain and NFTs are nothing short of revolutioninsing the industry’s revenue stream.

They not only provide unique fan experiences but are also providing new monetisation avenues for businesses. By offering limited-edition collectibles and exclusive content combined with secure transactions, they are a popular global tool for revenue generation.

One of the lesser talked about areas is the game publishing business. It holds immense potential as despite having a massive gaming market, in India there is a lack of adequate distribution channels. This limits the reach of game developers, especially the smaller, independent studios. Providing a golden opportunity, the Indian market needs a level playing field that fosters a more diverse and vibrant gaming ecosystem.

Any esport business understands the significance of new user experience and engagement. Metaverse, is one such space where selling of digital merchandise, carrying of tournaments in a virtual arena and expansion of a loyal customer base is possible. While it is still an evolving space in terms of its integration with traditional esports, it does have immense potential. The publishing business holds immense potential. Underserved demand due to distribution limitations presents a golden opportunity.

As esports matures, it is essential that we focus on sustainability and corporate social responsibility (CSR). It’s about time we realise that it is much more than a footnote in the corporate brochure, but a commitment towards our collective future. We have to allocate significant resources and focus towards DEI, to not only enhance reputation but also align the business with a socially conscious audience.

The industry is at a critical juncture with huge growth potential both local and global. One needs to think beyond just leveraging current trends and needs an agility to adapt, change and innovate with an ever evolving market. The industry needs forward thinkers and people ready to invest in its potential.

The author is Founder & CEO of EsportsXO.