India’s gaming market was valued at $2.6 billion in FY 2022 and it will be worth $8.6 billion by 2027 as it clocks a compound annual growth rate (CAGR) of 27 per cent, said a report on Thursday. There are 507 million gamers in the country in FY22 out of which 120 million are paying users, according to the report by Lumikai, a gaming-focused venture capital fund. The number of gamers is expected to touch 700 million by FY 2025, growing at a CAGR of 12 per cent. India recorded 15 billion downloads in FY22 to become the largest consumer of mobile games in the world. It is home to more than 900 gaming companies. “India crossed half a billion gamers in FY22, up from 450 million the year prior. Industry growth is expected to be fuelled by a rapidly increasing gamer base, higher conversion to paid users, and increasing sophistication of Indian gamers. With the market now truly mainstream, we are thrilled to be at the forefront of investing in one of the fastest growing and most dynamic sectors in digital India,” said Justin Shriram Keeling, founding general partner, Lumikai. According to the report, Indians spent an average of 8.5 hours per week on mobile games. Time spent on top mid-core games (like the now-banned BGMI) was approximately double that of top casual games. A game called Free Fire led the pack with an average of 109 minutes spent per user per day. The average revenue per paying user grew 11 per cent to $20 per year, with 2 million New Paying Users (NPU’s) added per month, the report said. Nearly 48 per cent of gamers spent money on mid-core games, while 65 per cent of paying gamers said they made in-app purchases at least once. In FY22, mid-core games were the fastest-growing gaming category, achieving growth of 32% and grossing combined revenues of $550 million. Salone Sehgal, founding general partner at Lumikai, said that the last 28 months have been watershed years in terms of attracting VC investment of over $2.6 billion in the Indian gaming landscape. “Sustained capital investment and liquidity outcomes in the form of strategic exits valuing over $750 million, multiple unicorns, and a publicly traded company have heightened the interests of entrepreneurs and investors alike. This sustained momentum should further drive entrepreneurial ambition and innovation in the Indian gaming industry,” she said. Indian gaming companies are on track to raise $513 million for the calendar year 2022. The gaming sector funding is up 380 per cent from 2019 and up 23 per cent from 2020, the report said.