Online Gaming Carries Huge Economic Potential for Pakistan

Online Gaming Carries Huge Economic Potential for Pakistan

Conference Discussed Current State and Growth Challenges Facing Gaming Industry

The Pakistan Software Houses Association (PASHA) with the support of technology and entertainment giant Tencent organized a conference in Islamabad on August 30 to discuss the current state and the economic potential of the Pakistan gaming industry, as well as the challenges that face the sector’s growth.

Panelists at the conference deliberated on how the country’s gaming and animation sectors could play an important role in helping Pakistan achieve economic growth and expand its IT and ITeS exports. A special focus was given to discussions on the right steps to address the challenges that stand before the industry and its potential to achieve a solid growth trajectory.

PASHA Chairman Badar Khushnood highlighted that Pakistani users have spent $260 million on video games and that the country has the potential to reach out to a $90 billion mobile gaming market as the country’s game developers typically produce mobile games for the global audience.

“Most of the games are published by international game giants like Electronic Arts (EA) Inc., Ubisoft, Lion Studios, and Supersonic Software. If supported with the right policies, the gaming sector can spur economic growth in Pakistan,” Khushnood pointed out.

“Pakistan’s IT industry is active in the mobile gaming industry, and is well poised to capture the immense opportunities the global video games industry brings,” stated Lih Shiun, Senior Director for Public Affairs at Tencent.

“Apart from direct economic impact through jobs and economic output, video games also generate secondary economic value for Pakistan, such as through eSports and digital games related events like the current PUBGM campus championship.”

“With video game-related technologies increasingly being used in other sectors and areas such as industrial design and cultural heritage promotion and protection, you can see how much potential there is for Pakistan’s video gaming sector,” Shiun concluded.

The conference attendees included representatives from the government, gaming companies, telecom operators, entrepreneurs and freelancers. Discussions covered topics such as policy interventions and ease of doing business, talent development, technical infrastructure, investments, and others. It was noted that by ensuring the right business climate, the Pakistani gaming industry could reach a size of $400 million annually.

Online Gaming in India is in a Similar Situation

The similarities between the situation of online gaming in Pakistan and India only begin with the fact that the gaming-related legislation in both countries is based on the British-era Public Gaming Act of 1867. The Indian online gaming sector too has an immense economic potential for domestic and global export growth and is striving for enabling regulation with one of the main questions being whether it should cover skill gaming only, or it  should encompass games of chance and online casino entertainment as well.

A 2021 report by global financial advisors KPMG evaluated the potential of the Indian online gaming market as capable of reaching a value of $3.7 billion (₹290 billion) by the Financial Year (FY) of 2025 across the casual, real money gaming, online fantasy sports and esports verticals. The report estimated the FY 2021 size of the market at $1.7 billion (₹136 billion).

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At the same time, the Indian gaming industry is faced by challenges posed by the outdated and patchy legal landscape and the lack of a modern-day comprehensive regulatory framework over gaming operations and activities.

This is resulting in regulatory uncertainty and substantial compliance burden across the different territories of India. While some states have liberated the sector through a licensing regime, others have moved towards completely banning it, and many are still relying on the 1867 Public Gaming Act.

The recent few years have seen a number of developments, including committee recommendations, constitutional court directions, and the introductions of draft bills in parliament such as the Sports (Online Gaming and Prevention of Fraud) Bill in 2018 and the Online Gaming (Regulation) Bill in 2022, all seeking to alleviate the current situation on the national level.

Proponents of central regulation over online gaming point to the number of potential benefits that such a move is able to bring, including enhanced player safety regarding payment processing, privacy protection and fraud prevention, customer support and protection against problem gaming and exposure of minors, and a reliable business climate, job creation, economic prosperity spilling over to other sectors, and a hike in tax revenue collection.

 

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