VIDEO GAMES ARE DIFFERENT FROM REAL MONEY GAMES. PERIOD.

In India, video games are often misunderstood by both the society and the government. They are frequently misclassified as online games involving an element of gambling and staking money, and are perceived as addictive and harmful. However, there is a significant distinction between the video games and real-money online games, and misconceptions surrounding video games in India.

One might ask, why are we discussing this? Well, recently, Indian video games and esports companies have called for a clear distinction between video games and real-money games. A consortium of over 70 video games and esports companies in India, has written a letter to the Prime Minister’s Office (PMO), and the Ministry of Information and Broadcasting, advocating for a video game-focused policy to be crafted for India tailored for addressing the unique challenges of the industry. This is a much-needed step to safeguard the interests of passionate Indian gamers, developers and e-sports enthusiasts and address the misconceptions the Indian society holds towards video games.

Before I delve into my perspective on this issue and examine the proposed recommendations by gaming and esports companies, I aim to clarify the distinction between video games and real-money games. Additionally, I wish to highlight the potential of video games for the Indian AVGC-XR sector and its impact on employment.

SO, WHAT’S THE DIFFERENCE?

Real-money games, such as carrom, rummy, poker, teen patti, or fantasy cricket leagues, involve players betting money and competing to win a pool of money. These games can be both games of skill or chance, are highly addictive, and akin to gambling. On the contrary, video games are primarily designed for entertainment purposes, and do not have an element of staking money.

POTENTIAL OF VIDEO GAMES FOR THE INDIAN GAMING INDUSTRY

As per India Games Market Reports by Niko Partners – a video game market research company, India’s video game industry will be worth USD 942 million (which is around Rs 8352 crores, assuming 1 USD = INR 83.52). The total revenue from video games – Mobile, PC and Console in India is set to surpass USD 1404.5 Million by 2028 while the number of gamers in India will increase to 730.7 million by 2028. Video games are set to become the largest entertainment industry, even bigger than the Bollywood or Tollywood film industries.

To achieve the expected growth in revenues, companies in this sector will require substantial investments, a large pool of skilled creative professionals, and support from the Indian Government’s AVGC-XR policy and budget allocations. For this purpose, it is crucial that Indian youth to look at a career in gaming as lucrative opportunities, whether as competitive esports players, game developers, animators, or gaming content creators. This requires challenging the societal and parental misconceptions, that view video games as merely a “waste of time,” addictive, or potentially causing aggressive behaviour in children. Moreover, enhancing career prospects in gaming involves ensuring competitive salaries and overall fulfilment in the industry.

The Indian Animation, Visual Effects, Gaming & Comics and Extended Reality (AVGC – XR) sector employs about 2.6 lakhs people across India. The industry poised to add 23 lakh jobs by 2032, driven by growth of Indian gamers, game development studios and the subsequent demand for creative artists like animators, pre- & post-production artists, 3D Modelling artists, etc.

PROPOSED RECOMMENDATIONS BY INDIAN GAMING STUDIOS

Mentioned below are the 10 recommendations made by Indian gaming studios and e-sports companies to the Indian Government, and some opinions on the need for such regulations and support for Gaming Industry.

1. To Separate Online Games into Video Games and Real-Money Games Categories in Policy and Taxation Framework
2. Propose to I&B to Impose Media Restrictions on Using Video Game Imagery in Real-Money Game Reporting to Avoid Confusion
3. Request to Appoint the Information and Broadcasting Ministry as the Nodal Agency for Video Games: This will ensure specialized department for addressing issues of Gaming companies, who will look into the supervision, administration and implementation of policies and projects related the growing AVGC-XR sector. They also argue that video games are a form of creative expression and a category under entertainment industry, thus requiring separate facilitating agency to look into its matters.
4. Establishing a Catalyst Fund to support Startups and MSMEs in the Gaming Sector: This move could potentially help motivate Indian indie developers to take up more ambitious projects, set up companies and create employment opportunities for existing skilled developers and creative artists in India.
5. To Offer Financial Incentives Including a Reduction in the GST On Video Games From 18% To 12% : Being a growing industry, companies have appealed to the government that video games and AVGC-XR products be taxed at a lower rate, as high tax rates lead to operational issues and restrict growth due to poor cash flows. They also seek support for the growing industry for at least the next five years, in form of tax breaks such as 100 percent tax holidays and exemptions for three consecutive years, followed by a tax reduction of 50% for the next two years They believe this would increase investment opportunities, invite foreign investments, and help in sustaining accelerated growth of the industry.
6. They Seek Support Structures to Promote Original Intellectual Properties Creation and Ownership (IPs): The companies request that banking and finance companies be encouraged to consider digital IPs in entertainment products as an asset, against which gaming companies can secure loans for development and expansion.
7. Need For Creating Benchmarking Frameworks and Standardized Guidelines for Higher Education in The Field of Game Development: Gaming studios seek standards and benchmarks set by global best practices in game development education to be developed in degree and upskilling courses for higher education. This included supporting development of private and public educational institutions to start rigorous curriculums from undergraduate levels to post graduate studies for game development, which provide opportunities to youth for employment in a relatively untapped sector.
8. Support Upskilling and Vocational Training in Game Development: This includes a request for government support in establishing training institutes and programs at reputable institutions to develop the skills of Indian youth for careers in the gaming industry.
9. To support Facilitation of Indian Delegations and Pavilion at International Gaming Events through Financial Assistance: They request financial assistance for video game conference organizers to support Indian developers and gamers attending international events and setting up pavilions and booths. This would help showcase Indian games and talent and sponsor Indian esports teams, similar to the support provided to mainstream sports.
10. To Rationalize the Import Duties on Development Hardware: Game developers need to import proprietary hardware like a Sony PlayStation, Nintendo Switch, an XBOX and latest Virtual Reality headsets and gears, to test their games for compatibility and quality assurance. However, gaming consoles and hardware cost a lot more than their retail price due to import duties. A reduction in import duties could help drive down operation costs for Indian game development studios.

These are crucial demands and Government support to sustain accelerated growth in AVGC – XR sector and Video Games development and E-Sports Industry. I am in support of Industry experts who believe that India avoids imposing restrictive policies on regulating video game playtimes to restrict gaming addictions, unlike China. Instead, video game companies and the government should focus on educating the public about the distinction between video games and real-money games. They should also highlight career opportunities in esports, gaming competitions, and game development.

 

From marketing perspective, the industry needs to showcase its potential and garner support of the society and investors – both local and global. Gaming content creators, influencers, and celebrities known for playing games should be engaged as brand ambassadors for the national AVGC-XR policies. This would encourage parents and the youth to view gaming as a potential career and a form of entertainment. These communications also need to highlight the research conducted on video games which highlight how video games can enhance cognitive health, problem-solving skills, hand-eye coordination, and socialization, while also helping to overcome loneliness and stress.

 

In my opinion, boosting the adoption of gaming in India requires a two-pronged approach. First, we need to secure government support through policy framework changes, tax subsidies, and budget allocations. Second, we must work on improving societal perceptions of video games by emphasizing the differences between real-money games and video games.