Financial budget shines spotlight on India’s gaming industry | Pocket Gamer.biz
Manish Agarwal is CEO of Nazara Technologies, Chairman of Games of the Internet & Mobile Association of India and Convenor of the Games Committee of the Federation of Indian Chambers of Commerce and Industry (FICCI)
The Indian gaming industry is well on its way to reaching prodigious heights. With over $1.5 billion in revenue, with analysts predicting that figure will triple to $5 billion by 2025, the industry is firmly leaning on the “mobile first” phenomenon.
The industry grew by nearly 40% in 2019-20, far more than TV, OTT, and social media platforms. The Indian market is further expected to grow faster and become a significant contributor globally, with a significant increase in the number of online gamers from 360 million in 2020 to 510 million in 2022.
In 2021, gaming startups in India attracted an estimated $1.6 billion in the nine months to September 30, surpassing the total value of investments in the sector over the past five years. India has also benefited from the slowdown in capital inflows into China due to the Chinese government’s strict measures against gambling companies.
The capital injection has also boosted innovation and entrepreneurship in the sector. The last two years have seen an exponential increase in the number of game development studios looking to create games that are deeply rooted in India’s rich heritage and culture.
New Year’s resolutions
By working with the government, the Indian gaming industry can achieve massive growth in all aspects below over the next decade, and this year’s budget has started the process of paving the way for industry to achieve these goals:
Build leadership and iconic global IP and brands and enhance India’s soft power to create globally iconic Indian character brands
- Long term value
Create long-term value and increase India’s foreign exchange earnings through the export of content and services
- Maintain the ecosystem
Foster and nurture the startup ecosystem, improve the ease of doing business, build a strong audience and fan base, grow infrastructure partnerships between the Center-State and PPP model, and become an ancillary service provider
- Skilled local workforce
Increase the skilled workforce by creating over a million jobs, boost the employability of India’s young workforce and enable sustainable and creative careers
The initiatives announced in the budget speech will provide industry stakeholders with a platform to voice their concerns and help create a pool of talent and infrastructure that could transform India into a hub for the ‘global gaming ecosystem, helping India’s young and skilled population to make games from India, for India and for the world.
Gaming will see a massive boost with the long-awaited 5G spectrum auction
Some of the key initiatives accelerating the growth of the game are:
- AVGC task force to be set up to pave the way for gaming industry
The announcement of the Animation, Visual Effects, Games and Comics Task Force (AVGC) by Finance Minister Nirmala Sitharaman will catalyze a framework for the gaming industry to build world-class infrastructure in all aspects of the gaming ecosystem. This is the first time that a concrete measure has been put in place to boost the AVGC sector.
The game will see a massive boost with the long-awaited 5G spectrum auction scheduled for this year. 5G technology will enable the gaming industry to produce a series of cloud gaming innovations, serve more gamers and facilitate live streaming by reducing latency and increasing server capacity.
- Ensuring access to digital resources
To ensure the digital divide does not widen, Sitharaman also confirmed that the government will allocate 5% of annual collections under the universal service obligation fund to facilitate broadband and mobile services in rural and remote areas. from the country.
Sitharaman said, “Our vision is that all villages and their residents should have the same access to electronic services, communication facilities and digital resources as urban areas and their residents,” leading to a larger gaming consumer base. large.
The budget was also sprinkled with small but important catalysts for India’s first mobile market, with the reduction of duties on certain parts of mobile phones (transformer in mobile phone chargers and camera lens in mobile phone modules). mobile camera) that will lead to cheaper smartphones in India.
- Facilitate partnership with states in Special Economic Zones (SEZs) to ensure better alignment with key industries, and gaming-focused SEZs to encourage infrastructure and talent pool development
The coupling of rural broadband connectivity, 5G spectrum auctions and the AVGC task force sends a strong message to global game publishers who will consider India as a key destination. The budget planned to replace the SEZ to allow more states to join.
It remains to be seen how the new policy takes shape for gambling SEZs across the country, but the most positive impact could include job creation, increased investment and more efficient administration while proposing policies financial and labor favorable.
- Launch of digital rupee to boost micro-transactions
Digital finance received a lot of attention in the budget, with the announcement of the Central Bank Digital Currency (CBDC), or digital rupee, which will be driven by the Central Bank using the blockchain technology. CBDCs can enable a real-time global payment system without the need for an intermediary bank, reducing leakage and reliance on cash in the long run. It may also lead to a boost in micro-transactions within the gaming industry.
The blockchain tax slab
bracketing crypto and NFTs in the 30% tax slab could deter consumers from investing money
Amid these bright spots, some cryptic moves have been played on the crypto industry and the outlook for gaming and decentralized finance. While recognizing virtual digital assets (VDAs) such as crypto and NFTs is a brilliant step, bracketing them into the 30% tax bracket with no deductions or offsets could deter consumers from investing money in cryptocurrency, NFTs and in-game assets, and may hinder in-app purchases.
NFTs are still in their infancy around the world, which means that such taxation will eventually have to adapt to the developing ecosystem. It will be crucial that future tax changes take into account the fundamental differences between these cryptos and NFTs. While both cryptocurrencies and NFTs are built on the same technology i.e. blockchain, NFTs do not innately possess monetary value and rather their existence is representative of items with monetary values. variables (like artwork, songs). A critical differentiation between fungible and non-fungible features of the VDA will allow industries like gaming to succeed without being crushed by a heavy tax burden.
We hope that, through a dedicated dialogue channel with the industry, the AVGC working group will be able to offer concrete suggestions to the competent legislative and judicial authorities to iron out the regulatory challenges around games of skill and chance, eliminate unscrupulous elements, and recognizing the gains the gaming industry could generate for the Indian economy with Web3.
Overall, the policies announced in India’s union financial budget pave the way for gaming companies to take advantage of the huge domestic market with a stable regulatory environment and technical and talented. India offers an incredible opportunity for global gaming companies to partner with local entrepreneurs across all aspects of the gaming value chain and be part of the most exciting gaming market to emerge over the next decade. .