India Gaming Update: 1H21
Mid-year look at deals and other happenings
The coronavirus pandemic triggered a gaming boom in India last year as covered in our two-part gaming deep-dive here and here. Lockdown induced boredom caused Indians to flock to games and investors towards gaming companies. India probably saw more investments in gaming last year than we have seen in the previous five years together.
The deal momentum seems to continue in 2021 as well. The new year saw the listing of India’s first gaming company, the signs of another potential unicorn and the inorganic entry of foreign players into the subcontinent. As we look to exciting times ahead, let’s do a recap of all the key events in 2021 so far.
Top Games in India (by total Android downloads)
This list has not changed significantly from last year with Free Fire, Coin Master and Call of Duty: Mobile all maintaining their place in the top 5. Free Fire and COD however may see increasing competition soon as Krafton announced the return of PUBG (rebranded as “Battlegrounds Mobile India”). The game is up for pre-registration on the app store with a speculated launch date in June 2021.
IPO of Nazara Technologies — India’s first gaming company
The ~INR 580 crore IPO of Nazara was subscribed 176x by investors. It made a strong debut on the stock exchanges and began trading at INR 1,971/share, up INR 870 or 79% from the IPO price of INR 1,101/share. It closed the day at INR 1,592 (still up from its issue price) after hitting a high of INR 2,025.
Indian Premier League (IPL), Fantasy Sports & Advertising
The return of the IPL (before its unfortunate cancellation) was just the fillip Fantasy Sports needed during the pandemic. Unlike other game categories, fantasy sports are anchored around live events. Unsurprisingly then, IPL 2021 witnessed a growth in the volume of category of advertisements led by none other than gaming unicorn Dream11. Not only was it amongst the top advertisers, it also led the pack in language-agnostic advertising i.e. it advertised equally across regional language sports channels and mainstream English & Hindi sports channels.
Apple, IDFA and Implications for India
Apple, much to the chagrin of app makers and advertisers globally, announced privacy changes to its Identifier for Advertisers (IDFA) in iOS 14. The IDFA is a random device identifier that Apple assigns to its devices, which can be used for tracking and identifying a user without revealing their personal information. Needless to say, this identifier is extremely useful to advertisers as it helps them with targeted advertising, attribution, and improved user acquisition.
Starting with iOS14, Apple introduced the App Tracking Transparency (ATT) framework. According to the new privacy framework, apps will need to receive permission from users in order to access the device’s IDFA. Apple said it will enforce this change for all third-party data sources and data-sharing agreements. But first-party platform owners such as Apple — or the game companies that have data for their own games — can still use data as per their terms of service.
India, where iOS penetration is only 2.74%, is unlikely to be affected by this, although any Indian game company building for a global market will need to take IDFA into account from a future game monetisation perspective.
Funding Galore
There were ~17 key deals in 1H21 or an average of 3 per month. The three key highlights of the table above are:
- Stillfront’s buyout of Moonfrog Labs signals a serious interest in the subcontinent from large global strategics
- Krafton’s investment in Nodwin may hint at community-building around Battlegrounds Mobile in the long term
- MPL, a soonicorn, once again shows the potential for RMG / Fantasy Sports to scale faster and have easier monetisation given the upfront fee collection than casual games. Venture Monk wonders however if this segment will ever have global appeal or if Dream11, MPL etc. would need to eventually diversify into casual games as well. RMG players such as Games 24x7 certainly seem to think so.
So there you have it. A round up of all the major developments in Indian gaming in 2021 so far. If you liked reading this, you may want to check out our 2-part deep-dive on the sector here and here. Please follow us both here and on Twitter for more VC related news, views and analysis.
