IGDC in Hyderabad, India: The 021 Fund's Trip Report
Last November, a few of our team members went to Hyderabad, India to participate in IGDC (India Game Developers Conference). Our team member Yuta is here to tell us about the trip.
IGDC is a massive event that invites platformers, publishers, startups, and anyone else doing business in the Indian gaming ecosystem. This time, we participated in the event to meet up-and-coming Indian gaming studios and startups and gather some insights on the market.
Fast, Appealing Growth of the Indian Economy
India’s economy is rapidly growing and is expected to continue doing so for a while. Plus, there is an increased appetite for investors across the globe to invest in the market, boosting the overall momentum of Indian startups. As a macro trend, India now has the world’s largest population, and people under 30 make up about half of that. This means we can expect an increase in the country’s workforce and the amount of disposable income. That is why the market is getting a lot of attention as the hub of future business activities.
This ongoing trend is helping Indian startups with their fundraising and motivating young people to try building their businesses. We expect these young startups to start shaping their ideas into products and services in 2024 and onwards, so now might be a reasonable moment for investors to consider investing in India.
In addition, the Indian government is putting in a lot of effort to digitalize the country. The smartphone penetration rate has surpassed 50% (700 million people) in the last five years, and close to 40% of the population now uses digital payment with the advent of UPI.
We assume that it is getting much easier for people in India to consume digital content, and with the growing economy, my prediction is that the number of digital goods and their consumption rate will increase, just like physical goods.
The Ever-expanding Mobile Gaming Market and Its Potential
We expect mobile games to lead the growth of the Indian gaming market. There are some retailers in certain cities that sell used gaming consoles, but looking at the disposable income of the middle-class population (about 1.2 billion), we feel that it will take some time before console games become commonplace in India. In addition, the country is in a phase where digital-native users who are used to playing mobile games are becoming wealthier. So, I believe that the mobile gaming market will accelerate its growth. The Indian market had a strong preference for real money gaming, but with the changes in the country’s tax policies, the users’ interests may shift to more traditional types of games.
For example, our portfolio company, SuperGaming, is conducting its closed beta test for an upcoming battle royale game INDUS. There are more than 8 million pre-registrations, and the number is steadily getting closer to the company’s goal of 10 million. This metric is a good representation of the Indian gaming market’s potential.
Investing in Emerging Markets at the Right Moment
India’s economy is growing rapidly, and there is a substantial increase in the amount of content for the Indian audience, making consumer behaviors more volatile. The culture, languages, and consumer behaviors are quite diverse depending on the region and income level, so the Indian market is much more complex than many would anticipate. That is why we must keep up with the tide and be ready for the right moment to officially enter the market.
To accurately capture the complex market and prepare ourselves for potential business opportunities, we have to accumulate information from local teams that directly interact with the consumers in India. We will continue to communicate with SuperGaming, as well as the companies we met during this trip, and stay up to date.
Conclusion
It was my first time in India, and with the country being so large, I felt that some infrastructures and systems hadn’t been able to keep up with the rapidly growing population and economy. However, that also indicated massive opportunities in the country, and I met a lot of young, passionate entrepreneurs willing to take on new challenges and make an impact on society. I am looking very forward to the future of this market!
The 021 Fund is constantly looking for startups building products that meet the social and creative needs mentioned above. In addition, we are looking to invest and collaborate with startups building products and solutions in areas such as AI, Web3, and the Phygital spaces. Please feel free to contact us HERE.
Bandainamco Entertainment 021 Fund Associate , Yuta Kazama
After joining Bandai Namco Entertainment in 2019, Yuta worked on company analytics and budgeting services, and is now in charge of preparing mid-term business plans for company units. He also oversees executive planned projects, while aiding with investments in development companies and business entities from areas relative to the current line of BNE’s business.