India is already a large market for mobile gaming.  A recent report put the number of mobile gamers in India north of 130 million users of the total 223 million odd mobile internet users in India.  But the level of monetisation is still quite low with the same report saying that only approximately 15-18 per cent of them paying for games with low ARPUs.   The total mobile gaming market is estimated at approximately $200 million but the big potential is whether India can become as big as China in mobile gaming with market size of approximately $6 billion and growing in a strong double digit rate.

Monetisation of mobile gaming with in app purchases (IAP) and subscription services to gaming platforms are popular modes of monetisation in India.   IAP is yet to take off in a material way due to various constraints including lack of appropriate payment mechanisms.   In China, reports suggest that mobile gaming (premium) monetisation is equally split between carrier billing and wallets such as Alipay.   This blog focuses on state of carrier billing in India and what important steps the operators in India could do to help drive the ecosystem.

1.       Consistent revenue shares

Today revenue shares across operators vary significantly for the developers.  And across most operators revenue shares are seen as something to be negotiated one to one with mobile internet companies and developers instead of it being a standardised platform with terms and conditions as we come to expect across all other wallets.   Some operators took early lead in moving to a 70:30 regime – where they pay out 70 per cent to content owners.   But this has not become systemic.    The longer the ecosystem of operators take to get to a standardised revenue share, it holds back the development of the gaming ecosystem.

2.       Standard APIs (Application Program Interface) for in app billing

TRAI introduced several consumer protection measures that have made carrier billing safe for the end consumers.  This included explicit consent before charge, a clear advise of charge going to the developer and one click way to deactivate.  This was also followed through with clear rules of engagement with the customer and marketing practices.  The flip side of these rules has been that some of the APIs that have been developed have not suited for gaming.  For instance, the rules require that the payment page where customer gives consent needs to be a third party hosted payment page.  For in app purchases, this causes a problem.  This means that for a gamer who wishes to do a small value IAP, the requirement for showing the payment page may force the user to leave the app to make the payment and come back into the app to continue the game.   Operators will need to work with TRAI to resolve the specifics of these rules in a manner that protects consumer wallet while facilitating ease of charge.

3.       SMS billing

SMS billing is popular in other large gaming centric markets like China.  SMS billing has two distinct advantages.   One several gamers may be ‘offline’ or with just 2G coverage while playing a game and if they need to pay, the effort of opening the payment gateway page means that lack of internet could cause a conversion fall.  SMS has the advantage of needing no mobile internet connection and just an active phone connection to enable the transaction.  This transaction flow in India is prevalent with user generated SMS.   This SMS platform is, however, not that widely used and restricted in its access to select gaming developers as yet.  Operators could re-think this entire flow of SMS billing to enable this as a standard API to all developers.  A recent hit in china – Plants vs Zombies has gained massive traction in part primarily due to use of SMS billing as a mechanism.  

4.       3G/data connectivity

On Mobango – the app store owned by our group (, only about 30 per cent  of games are below 5MB in size.  Many are significantly bigger in size that causes a massive gap between download intent and the user actually being able to download and enjoy the game.   Most times games have significant amount of media that needs to get downloaded post the initial download of the game.   With enhanced spectrum with most major operators in India, improved 3G connectivity will enable better download completion rates and for sure higher monetisation of games.  

5.       Game is entertainment; needs indie developers to do well

Of the top 10 games in India, most are from global game publishers.  Of top 10 games in China, most are local developers.   This has taken a lot of innovation and cooperation across all stakeholders – app stores, distribution platforms, handset vendors, payment providers and wallets. There is a terrific opportunity now to remove some of the difficulties that young gaming companies face, make the process of integration, reports, payments, etc much easier than it is now to support the growth of the gaming business.    Carriers have an opportunity to play a central role in this.

Gaming ecosystem is coming together well in India with more titles being locally developed and marketed.  While it is well known that India is already home to a massive number of downloads (according to App Annie data, India ranks 3rd in global Google play downloads) that are free with limited monetisation to the developers, the real challenge to solve now is to provide a scalable monetisation ability that enables users to engage with their games safely and make micro transactions safely and securely.   This infrastructure for this monetisation is still in early days and we should expect Indian gaming industry to come of age quite quickly.

(Badri Sanjeevi is the co-founder and CEO Mauj Mobile.)

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