"India has become one of the leaders in the online gaming industry": Siddharth Sharma, Head Digital Works' Head of Strategy

Head Digital Works' Head of Strategy Siddharth Sharma

Esports and fantasy gaming were the talk of the town during the latter half of the 2010s. Foreign companies caught this buzz a long time ago, but Indian companies arrived at the party via the slow-but-steady route. Many such Indian ventures began in the 2000s itself but have grown rapidly in the past five years, thanks to an increase in smartphone users and affordable internet in the country.

Head Digital Works (HDW), founded in 2006, has been incredibly successful over the years in developing and operating skill-based gaming applications for the online gaming industry. Today, they have over 15 million players across multiple products and are one of the leading companies keen on delivering entertainment to the masses through online gaming.

The Indian online gaming sector stood at $1.07 billion in 2020. Expected to turn into a $2 billion industry by 2023, the gaming business is noticing an astronomic development in India. These numbers point towards numerous new trends in the coming years

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Sportskeeda recently caught up with Siddharth Sharma, Head of Strategy at HDW, to discuss the growth of the Indian gaming industry, the company's new ventures, the need for responsible gaming and their plans for the coming years.

The online gaming industry in India saw a sharp rise during the pandemic since everybody had to maintain social distancing and were cooped up in their homes. This increased their dependency on smartphones for entertainment and the gaming sector grew hand-in-hand. As per a report by KPMG in June 2021, there were 420 million users in the casual gaming market in India.

As per the KPMG's report on the Online gaming market in India.
Users: 433 mn
Revenue: INR 136 bn
• Casual: INR 60.2 bn
• Real Money Games: INR 49.8 bn
• Online Fantasy Sports: INR 24.3 bn
• Esports: INR 1.7 bn https://t.co/b4I1Svub1T

Understandably, this contributed to the growth of HDW as a whole. Siddharth explained in detail the reasons behind the substantial rise in users, saying:

"The KPMG report of June 2021 has highlighted the growth of the Indian gaming industry, more so during the pandemic. Better internet connectivity, availability of affordable smartphones, and a shift in gaming as a career from casual gaming are some factors contributing to this growth. This has led to overall growth in the gaming industry across platforms - from consoles, PCs and smartphones [and across] types of games - single-player, multiplayer, and online real-money gaming."

He also emphasized how the increased screen time on their rummy platform A23 has led to a rise in year-over-year revenue, by saying:

"The time spent by players on our A23 app has increased to over 120 minutes per month on average in the past year. This has contributed to improving our YoY revenue by over 40 percent. With most state courts now supporting industry arguments between skilled and chance-based gaming, we are positive that the stability afforded to the sector will enable it to continue to grow at a steady rate."

The increased penetration of smartphones also has a lot to do with more people opting for online gaming. At the same time, however, there needs to be a perfect balance in demand and supply. With more and more users keen on playing games on their mobile phones, it falls to gaming companies such as HDW to innovate their content and satisfy this thirst.

After two years of boost in traffic during the pandemic, Indian gaming and esports companies are now looking at expanding their businesses in and outside India

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Recognizing the growth of the industry and explaining how things were going beyond "casual gaming now," Siddharth said:

"The rise of online gaming platforms has been boosted by affordable internet and smartphones. In 2018, 269 million online gamers contributed to a Rs. 44-billion industry. By 2021, this number grew to 436 million online gamers contributing to a Rs. 99-billion industry. Users are now moving beyond ‘casual gaming’. A recent report had suggested that over 80 percent of committed gamers in India spend considerable hours playing games."

He went on to place a focus on innovation and the use of technology to attract new players while ensuring users do not switch products, saying:

"However, with great demand comes an even bigger responsibility towards ensuring ethics and responsibility in gaming. Consumers today have a mindset of their own and are selective on how they respond to brand communications. Being in this industry for over a decade now, we have seen a shift in not only the type of content created to reach them but also the messaging that comes along."

Stressing on the importance of retaining users, Siddharth said:

"In this highly competitive market, online gaming platforms have to move beyond traditional games and use technology, innovation, and new channels to attract new players, and at the same time, have advanced analytics-driven engines that ensure that users don't switch platforms."

The market growth has been substantial, but it was on the cusp of being hampered after the Karnataka High Court banned online gambling and betting in September 2021. Fortunately enough, the same court recently struck down contentious amendments to the concerned act, thereby allowing some room for online gaming companies to continue with their business to a certain extent.

Karnataka Assembly passes the Karnataka Police (Amendment) Bill, 2021, to ban online gaming & curtail online gambling.

(File pic) https://t.co/RfgVDX0KaM

It was understandably a big boost for HDW, especially since their business revolves around rummy and fantasy sports and gaming.

Karnataka HC lifts online gambling ban, big relief for fantasy sports.

(Source – Business Standard)

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Siddharth was more than pleased with the recent decision of the Karnataka High Court and spoke about how stability can be achieved in the sector. He said:

"We wholeheartedly welcome this recent verdict, which provides ample clarity and reinforces the legitimacy of our businesses as constitutionally-protected activities. We believe that the government should now formally engage with multiple industry bodies and stakeholders to put in place progressive regulatory mechanisms for our industry."

He added:

"From a long-term perspective, this judgment is in line with what the Madras and Kerala High Courts have pronounced and brings in more credibility and stability to the sector as a whole. This, in turn, will lead to more investment, growth, and employment and add to the strong fiscal stimulus of the growing Indian economy."

NFTs, metaverse and partnerships with PKL & PVL

Web3 has been a major talking point of late, with non-fungible tokens (NFTs) being monetized heavily in the sports industry over the past year. Several sports teams are securing sponsorships from cryptocurrency companies while some sporting properties are already launching plans to build experiences in the metaverse.

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So it is only natural for online gaming companies to follow suit, especially if they hope to engage fans with cutting-edge technology and exciting content. In fact, there could be a point when earnings from online gaming and sports betting could be democratized as digital ownership.

However, this space is still fairly decentralized and the lack of a clear law could lead to issues down the road. Remaining optimistic about entering the world of NFTs while being aware that the vertical still requires sizeable clarity, Siddharth said:

"The whole space at the moment is too gray and nascent from a regulatory standpoint for us to seriously evaluate. Once greater clarity from the government and policymakers emerges, we can evaluate how to extend gaming into this space."

While there is some hesitancy to entering this market, Meta (earlier Facebook) hosted the very first gaming community challenge in India – Game of Tribes in December 2021. The American multinational conglomerate is always on the move to build gaming communities; a path that HDW could also follow, given its massive fan base.

Following its rebranding to Meta, Facebook has declared its first gaming community challenge in India. The Game of Tribes challenge will be spread across a half year and the groups will be judged on the engagement of their community.
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Moreover, with the gaming industry becoming more accessible and mainstream, it could be the perfect time for such organizations to build platforms in the metaverse or provide their users with augmented reality experiences.

Siddharth shed light on how HDW will start to evaluate ways for better fan engagement in the near future, but made it clear that their current focus lies elsewhere. He said:

"We are looking at various options for the future and are acutely aware that the first early adopters of the metaverse will be via gaming. While the focus is still on growing the core offerings in RMG as of now, we will definitely evaluate ways for the next generation of gamers to engage in a better way than they are today."

Although research, development, and innovation will continue to be key aspects of HDW, they have also landed some good partnership deals, leading to increased exposure and opening up new avenues.

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Over the past year, A23 has become the associate sponsor of the recently concluded Prime Volleyball League and Pro Kabaddi League. Volleyball and Kabaddi have gained a lot of popularity in recent years, especially due to the intense end-to-end action.

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In fact, both sporting properties have — like the IPL — combined sports and entertainment to grow their verticals slowly and steadily. So it was perhaps a no-brainer for A23 to use the massive fan base of both leagues to grow HDW's footprint across the country and garner brand exposure.

Siddharth noted:

"The Pro Kabaddi League and Prime Volleyball League are not just the best leagues in the country when it comes to their respective sports but also have a massive fan following across the nation."

He explained why the company decided to partner with both leagues and the objectives behind each of them, by saying:

"The idea behind the partnership with PKL was to support and encourage players of the game with a special focus on helping garner greater traction among those with a passion for serious online gaming. The second partnership was with the Prime Volleyball league - one of the fastest growing franchise-led sporting leagues in the country. Through this partnership, A23, and in turn, HDW intends to support and encourage a team sport like volleyball, bringing it to the forefront and connecting the nation with a common spirit."

He added:

"Furthermore, the hope was to build and enhance its reputation as the most preferred online gaming platform for users with a passion for serious online gaming."

Explaining the success of both partnerships, Siddharth said:

"Across both the partnerships, A23 benefitted from access to key PKL & PVL players besides television spots and strategic in-venue (stadia, playing mat, and prize distribution ceremony) branding. The collaborations came at the perfect time for A23 and HDW as [the latter] began the next phase of the branding and journey into a closer association with key sporting events in the country."

Responsible gaming and future roadmap for Head Digital Works

Growing the Indian gaming industry is the main objective for HDW and every company operating in the same market as them. However, while doing so, it is important to lay down some ground rules and regulations, and to function within the law, especially when real money is involved in fantasy and rummy sports, not to mention online sports betting.

To spread this message and enhance the meaning behind it, A23 roped in arguably the most marketable celebrity in Asia: Shah Rukh Khan. The Bollywood superstar is connected to all segments of society and is perhaps the right man to promote the idea behind safe online gaming practices. So, a couple of months ago, A23 launched the "Chalo Saath Khele" campaign and it was a huge success.

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A23 Cares. Let's play together. Responsibly.

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With India becoming one of the largest sports fantasy markets in the world, Siddharth explained the need behind launching this campaign by saying:

"Various studies have documented that the online gaming sector is only set to grow from hereon. India has become one of the leaders in the online gaming industry. However, there has been some pushback in online games involving real money. Hence, we believe this was the right time to launch our responsible gaming campaign."

He added:

"The aim of the campaign was to reach the masses through the partnership with Shah Rukh Khan to share the message of playing responsibly and following safe online gaming practices; not just on A23, but across all online gaming platforms. We also believe that fantasy is just one facet of real money gaming and the industry per se has a lot more to offer going ahead."

Looking towards the future, there is a lot to be excited about; the world is taking notice of advanced technology and online gaming is starting to be considered not just a viable profession but also one of the most profitable ones. Moreover, with a user being able to access games at their fingertips in a matter of seconds, engagement with them is becoming easier.

Although competition in the market is bound to increase, that can only be a good thing in terms of growing the market. With India being one of the most densely populated countries in the world, there is a massive market to target, courtesy of which adding more games could catch the eye of a demanding audience.

Siddharth certainly believes the same, and laid down the future roadmap for HDW by saying:

"We will look at expanding our gaming portfolio and adding only those games that we believe pass the skill test and is something that a user will enjoy playing. We will also look at avenues in non-gaming businesses where our expertise and wealth of data can be leveraged in the future."

The esports and online gaming market is one that has the potential to grow into a multi-billion dollar industry and perhaps even more in the coming years. Foreign companies such as FanDuel and DraftKings have done incredibly well in the online sports gaming and betting industry.

Indian companies need to map out their path to success and HDW is certainly doing just that. A23 has already cracked the online rummy segment, while Witty Games is a creative initiative in the freemium social casino gaming vertical. FanFight, a fantasy cricket app, has garnered over a million users so far, and the organization's latest addition is Cricket.com, which provides interesting data insights, thereby enabling fans with their predictions.

Through persistence, innovation and an understanding of the market, HDW has become a leader in the Indian online gaming industry. With their intelligent campaigns and clever partnerships, there is no doubt that they are the pioneers for a greater tomorrow in India's gaming sector and are expected to do well in the coming years.