Riding on more than 500 million gamers across mobile, PC, and Cloud gaming platforms, India’s gaming market has likely reached $2.6 billion in revenue this year which is expected to quadruple to $8.6 billion by 2027, a new report showed on Thursday.

The country now has about 120 million paid gaming users with at least $20 in revenue per user, according to the report by Lumikai, a gaming and interactive media venture capital fund.

With 15 billion downloads, India was the world’s largest consumer of mobile games in FY22.

“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,” said Justin Shriram Keeling, Founding General Partner, Lumikai on the sidelines of the India Game Developers Conference (IGDC) Summit in Hyderabad.

In FY22, mid-core games (like BGMI which is now banned, and Free Fire) were the fastest growing gaming category, achieving growth of 32 per cent, grossing combined revenues of $550 million.

According to the report, Nearly 48 per cent of gamers spend money on mid-core games, and 65 per cent of paying gamers claim they have engaged in in-app purchases at least once.

Indian gaming companies are on track to raise $513 million for the calendar year. Gaming sector funding is up 380 per cent from 2019 and up by 23 per cent from 2020.

“Web3 emerged as an increasingly popular technology in games, with 30 per cent of 450 Indian Web3 companies operating in gaming. Web3 games in India have raised $400 million in funding (2019-22),” the findings showed.

India-based content is growing in popularity with 80 per cent of gamers showing a proclivity to play games based on Indian intellectual property.

“The number of female gamers in India is on the rise. Male: female ratio of surveyed gamers yielded a 60:40 ratio, equally split between metro and non-metro cities,” the report noted.

“The last 28 months have been watershed years in terms of attracting VC investment of over $2.6 billion in the Indian gaming landscape. This sustained momentum should further drive entrepreneurial ambition and innovation in the Indian gaming industry,” said Salone Sehgal, Founding General Partner, Lumikai.

Lumikai has so far backed nine gaming startups including Loco, Bombay Play, Elo Elo, Studio Sirah, Cloudfeather Games.