Five Reasons Why Multinational Corporations are Investing in Indian Esports Teams

Get to know about the main reasons why MNCs are taking special interest in investing in Esports Indian Industry. Read to know more.

Nothing has truly captured the attention of the modern era in the sports and entertainment worlds like esports. Esports began as more of an underground culture but have since developed into a billion-dollar industry, growing at a rate of 14.5% annually. The gaming industry has experienced rapid growth over the past ten years, particularly in developing markets where there are more competitions, leagues, organisations, and—most importantly—more financial investments.

India is a major esports destination because it is one of the gaming industries’ fastest-growing markets and a centre for foreign investment, with projected annual inflows of $ 120–160 billion by 2025. Ten years ago, there were only 25 game developers in the country, but today there are over 250, including companies like Tencent, Nazara, Paytm, and Alibaba. India is anticipated to be one of the largest markets for esports due to the government’s promotion of a new digital economy, an increase in the accessibility of affordable smartphones, and the penetration of high-speed internet.

Mature markets such as the United States and Europe are certainly large, but they have already seen their fair share of investment. Companies seek to penetrate and establish a foundation in high-growth markets poised for exponential growth, such as India. The top five reasons why international firms are investing in Indian esports teams are as follows:

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Economic Growth and New Infrastructure

India has the world’s fifth largest economy and is expected to be the most populous country by 2025. Foreign companies are also getting more access to private capital as digital infrastructure improves, allowing start-ups and innovative businesses to scale and grow. Having policies and regulations that encourage foreign investment opens up opportunities for esports organisations to form India-based teams. There are currently 60,000 esports teams in India, with that number expected to quadruple to 250,000 by 2025.

The Digital Revolution of the Future

India was ranked 81st in the Global Innovation Index in 2015, but by 2020 it had advanced 33 spots to take 48th place. With strong developmental efforts to promote digital technology in a variety of sectors, including banking, finance, agriculture, rural development, and e-commerce, the government has also played a significant role in transforming a nation that had previously been largely offline into an online one. Since 98% of all gamers in India use mobile devices, the availability of inexpensive, high-performance smartphones contributes to the democratisation of gaming.

Increased Investment and a Shift in the Capital Market

So far this year, start-ups in India have raised a total of $10 billion through IPOs, surpassing the total raised in the previous three years. Indexes such as the NIFTY 50 are also expected to see an increase in technology-focused companies in areas such as e-commerce, the internet, and digital media. As monetization and revenue generation in the gaming industry rely heavily on technology, such as but not limited to online purchases, live streaming platforms, digital subscriptions, and even NFTs, such sectors complement the growth of esports teams.

The Ascension of Popular Game Titles and the Esports Prize Pool

Naturally, as more players and teams participate in a specific game title, there will be an increase in viewership and audiences, which will lead to a larger prize pool. With the arrival of PUBG (now known as Battlegrounds Mobile India), many significant tournaments have arisen, such as the PUBG Mobile India Series, which has a prize pool of 10 million rupees as of 2021. With more players and more popular games in esports, prize pools will undoubtedly rise, incentivizing organisations to enter the fray.

The Importance of Timing

The fact is that foreign businesses want to see a return on their investments. High-growth markets in the East, like India, prove to be a more alluring option for investors than markets in the West. Investment in esports teams now means that there is more room for valuations to soar and more untapped opportunities to be taken advantage of because India is still in a developing stage. For the time being, this also means less competition, but as the industry as a whole expands, more players will undoubtedly enter the esports market. Our culture and the way we consume entertainment have always included gaming. It will only be a matter of time before esports in India take off once the necessary infrastructure and components have been put in place.

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