Games Bharat plays: Decoding the explosive growth of gaming in Tier 2-3 markets

The gaming industry in India has undergone a dramatic transformation in recent years, expanding its reach beyond the metropolitan hubs to capture the imagination of Tier 2 and Tier 3 cities. This rapid growth has been fueled by factors such as affordable smartphones, better internet connectivity, and localized gaming content, which have significantly broadened the market’s demographic.

As per the India Mobile Gaming Report 2022 by gaming platform Mobile Premier League, “Tier 2 and 3 cities, which witnessed explosive growth in mobile gaming among other internet leisure activities, have rapidly ascended to the top, unseating gaming hubs such as the metropolises of Mumbai and Bangalore.” As per the report, Uttar Pradesh emerged as the top destination for mobile gamers, followed by Maharashtra, Rajasthan, Bihar, and West Bengal.

Gaming companies are quickly adapting to this shift by recalibrating their strategies to meet the unique demands of non-urban markets. The emphasis is on creating a localized experience that resonates with regional players through games with culturally relevant themes, regional language support, and tailored pricing models. The rise of local gaming influencers and grassroots esports tournaments has also played a crucial role in fostering a deeper connection with gamers from smaller cities, where competitive and community-driven gaming is on the rise. Companies like Krafton, Deltatech Gaming, Felicity Games, and STAN are leading the charge by tapping into these burgeoning markets and leveraging regional content and innovative marketing tactics to engage a diverse audience.

The impact of this growth is not just limited to numbers but also reflects a broader cultural shift, with Indian gaming now embracing local storytelling, folklore, and regional mythologies. The surge in popularity of games that feature Indian narratives and cultural motifs underscores the growing demand for content that reflects the country’s diverse heritage. As the industry continues to evolve, Tier 2 and Tier 3 cities are not only shaping the future of gaming in India but also setting new benchmarks for user engagement, cultural relevance, and market expansion.

Might of Tier 2-3 markets

Sharing his observations on the growth of gaming in Tier 2-3 markets, Srinjoy Das, Associate Director and Lead - Marketing, KRAFTON India, said, “Over the past few years, the gaming industry in Tier 2 and Tier 3 cities has experienced rapid growth, driven by increased smartphone usage, affordable data, and broader access to digital platforms. These regions now contribute significantly to the overall gaming user base, helping to close the gap with urban areas in terms of users, though urban markets still dominate in revenue. Mobile gaming is particularly popular due to its affordability, and localized content and regional marketing efforts have further boosted user engagement, especially in free-to-play games.”

In comparison to urban areas, Tier 2 and Tier 3 cities are seeing faster growth in user adoption, though urban regions maintain higher spending power. Local gaming influencers are playing a key role in driving community engagement, and competitive gaming is also on the rise, with increasing participation from players in these smaller cities.

Joydeep Mukherjee, Chief Marketing Officer, Deltatech Gaming, added here, “The gaming industry, especially poker, has witnessed a remarkable expansion into tier 2 and 3 cities in recent years. This shift from its urban-centric perception is evident in the diverse backgrounds of our recent Welcome Leaderboard winners, hailing from villages across Kerala, Punjab, Bihar, Chhattisgarh, and Uttar Pradesh. I believe several factors have contributed to this growth. The rising middle class in these regions has an increased disposable income, enabling more people to participate in leisure and entertaining activities like online gaming. Additionally, improved internet connectivity and smartphone penetration have made online poker accessible to a wider audience. This coupled with changing attitudes towards gaming and a growing acceptance of online entertainment have fostered the popularity of poker.”

He further added, “For us, Tier 2 and 3 towns now represent a growing and engaged market, often mirroring urban areas in terms of user participation and enthusiasm. We at Deltatech Gaming are democratizing poker, by building a community where players from all walks of life come together to experience the thrill of the game.”

“We can assuredly see the growth of affordable smartphones, data accessibility (thanks to Jio’s telecom revolution), and the localization of games in regional languages have been pivotal in this evolution. Reports suggest that mobile gaming penetration in Tier 2 and Tier 3 cities has surged by over 50% in the past three years, surpassing metro cities’ growth rate, which is now more mature. (Source: All India Gaming Federation and Ventana Ventures) According to a KPMG report, 60% of India's 507 million gamers are from non-urban areas, reflecting a stark rise in user engagement outside major cities. Unlike Tier 1 cities, where competitive and high-end gaming dominates. Tier 2 and 3 cities have witnessed a surge in casual and mid-core gaming, particularly in genres like Battle Royale, Multiplayer, and Hyper-casual games,” noted Anurag Choudhary, Founder & CEO, Felicity Games.

Citing reports by Lumikai, Parth Chadha, Co-Founder and CEO, STAN, said, “Tier 2 and 3 cities have witnessed explosive growth in mobile gaming and have rapidly ascended to the top, replacing gaming hubs such as the metropolitan cities of Mumbai and Bangalore. In fact, as per the list of cities revealed by the report, metros don’t occupy any spots in the top 10 gaming cities on the list. At STAN too, Tier 2 and Tier 3 cities have surpassed metro cities, now constituting 70% share of our gamer base. This trend shows the steady growth and penetration of the gaming sector in the country, supported by the growth of the Internet and mobile phone users, affordable smartphones, and localised content.”

Players from across the length and breadth of the country are taking to online gaming with gusto. This rise of gamers from Tier 2 and Tier 3 cities is reshaping the Indian gaming landscape in several ways. With a large number of new players that come from other, lesser populated cities, the market has expanded significantly to cover more people, increasing the overall number of users playing games.

Catering to the unique needs of smaller markets

According to Srinjoy Das, one major strategy is the development of games with content in regional languages and culturally relevant themes. This localization makes the games more relatable and engaging for local audiences. “For example, in Battlegrounds Mobile India (BGMI), we offer voice packs featuring audio from various celebrities and gaming influencers in multiple languages, including the newly launched Malayalam voice pack. These additions enhance the gaming experience and connect more deeply with regional players. Building on this, BGMI’s South India campaign embraced local cultures and tailored content to the unique interests of gamers. The ad went viral due to its authenticity. To address the lower spending capacities prevalent in these markets, companies are prioritizing free-to-play models with in-app purchases and localized pricing strategies. This approach ensures that games are accessible to a broader audience while accommodating different budget levels, making gaming more inclusive and affordable,” he said.

Das further added, “Targeted marketing is another crucial component of this strategy. Companies are leveraging local influencers and creating regional-language advertisements to build brand awareness and drive engagement. These tailored marketing efforts help establish a stronger connection with the local audience and enhance the effectiveness of promotional campaigns.

Additionally, supporting local esports tournaments and grassroots gaming communities is essential for fostering a sense of belonging and competition among players. For instance, we hosted BGIS 2024 in Hyderabad, which attracted significant footfall, and we are hosting the Battlegrounds Mobile India Pro Series (BMPS) 2024 finale in Kochi. By bringing esports experiences to fans across the country, we aim to broaden our reach and engage with diverse audiences, contributing to the growth and development of the gaming ecosystem in smaller markets.”

Anurag Choudhary said, “Gaming companies, including us, have had to rethink their strategies to meet the unique demands of smaller markets. One key adaptation is localization – games now come with regional language support (like Hindi, Tamil, and Bengali), and in-game characters often resonate with local tastes. For example, Garena Free Fire has created massive traction by offering a highly localized experience, aligning its gameplay mechanics and rewards with the preferences of gamers from non-urban areas. Additionally, game monetization strategies have shifted, as disposable incomes differ significantly in smaller markets. Companies have introduced micro-transactions as low as ₹10-₹20, making in-game purchases more affordable for these audiences.”

Parth Chadha noted, “Gaming companies are strategizing smaller market needs through multiple approaches like localized games, competitive tournaments, etc. They are together building a robust ecosystem of gaming infrastructure in India. At STAN, too, our approach is tailored for smaller markets by simplifying growth, earnings, and catering to local gaming preferences. Our mobile-first design ensures gamers can connect anywhere with cutting-edge technology and rewards them for their contributions, enhancing their experience. We are building close-knit clubs for enhanced community engagement and deeper connection. To cater to diverse preferences, we have also opened up multiple earning streams, such as gifts, passes, and targeted advertisements. By emphasizing on popular titles like BGMI and Free Fire, we are aligning our offerings to local communities. We have also worked on simplifying the onboarding process with streamlined club setup with just one referral. We are dedicated to empowering creators with global reach, specialized tools, and insights for audience engagement.”

Local cultural influence on game preference

Srinjoy Das observed, “Games that incorporate regional themes, such as local myths, folklore, and traditional stories, tend to be more popular as they connect deeply with the cultural identity of the players. Offering regional language options makes these games more accessible and relatable, attracting a broader audience that feels comfortable engaging with content in their native languages.

Game recommendations from popular local influencers further influence preferences, often promoting titles and genres that align with the cultural tastes and interests’ players. These influences help create a sense of community and drive engagement with locally relevant gaming content.”

Anurag Choudhary noted, “Indian gaming companies are increasingly incorporating local cultural references to resonate with players in Tier 2 and Tier 3 cities. Games inspired by Indian movies and mythology are gaining popularity. For instance, ‘Baahubali: The Game’ successfully adapted elements from the blockbuster movie, allowing players to build kingdoms and battle in an Indian setting. Similarly, games like ‘Chhota Bheem: The Hero’ tap into well-known Indian cartoon characters, offering a casual gaming experience that connects with local audiences. This trend highlights the cultural connection and affinity for Indian narratives in gaming.”

Parth Chadha added here, “In India, gamers have caught on to local flavours and there is a huge appetite for local storytelling. Indian gamers come from different regions and have different language preferences, which is why localised games are more preferred. Be it games in multiple Indian languages, including Hindi, Tamil, Telugu, and Bengali or games celebrating local events, culturally relevant themes and design language resonates much more with the smaller cities audience. Additionally, changing plots, characters and concepts in the game to suit the cultural context of India and its regions not only attract more players from across cities, but also increase engagement and retention rates. For example, there is a rise in games that embrace Indian cultures, mythology, and history in their content. This has not only made the games more realistic but also given homage to the Indian cultural diversification and tapped into the pool of budding gamers in smaller cities.”

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