A consortium of more than 45 video game companies from across India has penned a letter on behalf of the industry, to the PMO office seeking to gain separate recognition and clear differentiation from Real Money Games (RMG) and Fantasy Sports in the eyes of regulators and the public.
In the letter, the industry expresses gratitude to the GST Council, the Department of Revenue, and the Government of India for exempting video games from the recent 28 percent GST decision. The letter states that this consideration acknowledges that video games do not involve any form of wagering or staking, highlighting the diversity of business models within the industry.
However, despite the favourable GST exemption, the video games industry finds itself entangled in a challenging situation. Campaigns continue to associate RMG and Fantasy Sports with Video Games and Esports, both domestically and internationally. This misrepresentation projects a homogenous image, suggesting that the entire games industry of India is adversely affected by the 28 percent GST imposition.
The industry points out that such an assertion is factually incorrect and stems from the use of an overly broad term like “Online Games,” which unfairly clubs different industries together, leading to widespread confusion. The stakeholders have shared that this confusion has sparked controversies and heated debates surrounding the imposition of GST as well.
Globally, it is customary to draw a clear distinction between games involving wagering (categorized as “iGaming”) and games without wagering (categorized as “Video Games”). However, in India, these mutually exclusive categories have been consolidated under the common umbrella of “Online Games,” causing further confusion and misrepresentation.
The industry stakeholders highlight that the consequences of this confusion have manifested in two significant ways – Unfair Social Stigma and Clouded Investor Perception.
“They international game corporations, publishers, and investors perceive that the Indian regulatory system does not differentiate between Video Games and RMG/Fantasy Sports (iGaming), leading to hesitation in investing in Indian video game companies and discouraging potential investments, co-productions, and strategic partnerships,” the letter reads.
The letter highlights the significance of Video Games as an artistic and narrative entertainment medium, recognized and heavily supported by various countries for their soft power projection and export revenue. It states that the Indian video games industry is on the cusp of explosive growth, with two dozen video games based on original IPs set to be released in the next five years, showcasing Indian stories, character brands, and ethos worldwide.
To sustain and further develop this growth trajectory and economic contributions, the industry emphasizes the critical need for clear differentiation and categorization of Video Games as separate entities from RMG and Fantasy Sports (iGaming), aligning with global practices.
“The industry seeks the support and recognition it deserves to thrive and continue contributing to India’s rich and diverse gaming landscape,” the letter reads.