Reliance Jio Sets its Sights on India Mobile Gaming

Reliance Jio has brought about a major digital transformation in India, including in the gaming and esports scene. The Indian telecommunication company launched in 2007 as Infotel Broadband Services Limited (IBSL). Reliance Industries bought a 95% stake in the company in 2010 and renamed it Reliance Jio Infocomm Ltd in 2013, popularly known as either Reliance Jio or Jio Platforms, or just “Jio”. Reliance Jio opened its LTE and 4G services to the public in 2016 and is currently the leading telecom operator in the Indian market by both subscriber base and revenue. As of November 2020, the company 382 million subscribers, which represents a 35.34% market share.

India Telecom Market Share (November 2020)

Source: Telecom Regulatory Authority of India

India is one of the fastest growing mobile gaming and esports markets in the world with the greatest number of mobile game downloads globally in the first 9 months of 2020. It is also home to the second most smartphone and internet users in the world, with only China having more.

The introduction of Reliance Jio’s internet data packages in 2016, which provided affordable internet access to Indians for the first time, started a major digital transformation in India – the “Jio Revolution”. In its first 6 months of operations, Reliance Jio offered each customer 4GB of data and 100 SMS messages for free every day, plus unlimited free voice calls. As a result, Jio acquired over 100 million subscribers in its first year providing LTE and 4G data in India.

With sudden access to all the data they could want, it is no surprise that India’s mobile data consumption grew significantly. Jio gradually moved from free services in 2016 to ultra-low priced tariff plans in 2017. Jio’s aggressive pricing pushed its competitors Bharti Airtel, Vodafone, Idea (now Vodafone-Idea), and BSNL to compete on price, which led to a significant change in how Indians consumed data. Per-user data usage jumped from a meager 500MB per month in 2016 to 10.6 GB by 2019. Unlike other telecom operators, Reliance Jio managed to cover all of India – even the rural areas – with LTE and data services..

Jio also marketed its smartphones, called LYF, along with its 4G services. LYF 4G-enabled smartphones were affordably priced between INR 5,500-20,000 ($76 to $275), and LYF captured 12.6% of the Indian smartphone market in Q1 2017. Jio is also supporting Indian game developers through its “JioGenNext” startup accelerator program and the games produced by those studios available to be downloaded via Jio App Store. With Google and Apple’s dominance in the app store currently under fire as seen, with game companies such as Epic and Unity challenging the status quo, Jio could leverage Jio App Store to be the main app, including game, distributor, for its phones. Jio is also in a unique position in which the company is trying to convert feature phone users, including those using Jio feature phones, to smartphone users. More than 450 million Indians are estimated to still use feature phones. If this populace can be converted through Jio smartphones, they can also acclimate to use Jio App Store instead of other app stores, thereby providing the company with the chance to enter the mobile app, especially games, distribution business.

Jio’s rise in India is even more important as India added 200 million smartphone users in 4 years, increasing their reach from 300 million in 2016 to over 500 Million in 2020. Jio is able to compete in both data package sales and marketing its own phones, resulting in an ever-increasing streams of revenue. Despite competition from other smartphone brands and telecoms, Jio’s revenue skyrocketed in just a few years, from a meager $167,254 in 2017 to more than $8.78 billion in 2020.

Reliance Jio earnings 2017-2020

Reliance Jio’s entry and impact on the Indian gaming ecosystem

The changes during the “Jio Revolution” in 2016-17 jumpstarted the Indian gaming ecosystem. Game developers, publishers, smartphone manufacturers, and the Indian youth, all rode the Jio wave. The proliferation of cheap data and smartphones, along with Indians’ increasing disposable income, grew the number of mobile gamers in the country from 120 million in 2016 to 326 million in 2020, an increase of 172%. The number of game developers has also surged to 275 today, from 25 in 2010.

Jio Games launched in 2019, publishing games for casual gamers. Within a year of its launch, Jio Games registered 5 million downloads. Jio Games offers games across genres racing, action, sports, arcade, board, adventure, educational, and strategy. Jio’s owner, Mukesh Ambani, has also impressed upon the large scope of gaming in India and how Jio could help realize Indians a new opportunity in gaming.

In 2020, Jio stole the limelight by raising equity funding from global giants including Facebook, Google, and Intel. It is interesting to note that the rounds of investment announcements started almost immediately after Indian government’s clampdown of foreign direct investment from China (Niko Partners wrote about the policy here). By far, Jio has raised a total of $19.97 billion by selling 32.79% of its stake. Jio plans to leverage the technological capabilities and data brought by its new investors to expand its presence in the retail segment, develop and deploy 5G technology, and manufacture cheap smartphones for the Indian market. Its partnership with Qualcomm focuses on the development and deployment of indigenously built 5G technologies and launch them in the 2nd quarter of 2021. Jio also signed up a deal with Google to develop low-cost phones for 4G and 5G networks. To fast-track the production of technology and devices supporting 5G, Jio also conducted multiple cooperation deals with Samsung, Realme, Vivo, Lava, Karbonn, and AR gaming startup Krikey. Jio also partnered with Microsoft to launch Microsoft’s game streaming service Project xCloud in India.

Jio’s entry into the mobile gaming could be a positive sign for the Indian gaming ecosystem given the impact it has created in the telecom industry through its widespread cellular and broadband connectivity in such a short time.  According to Niko’s 2020 report, India’s mobile games revenue has a yearly growth rate of 53.7%, more than twice of its PC games revenue yearly growth of 20.9%. Thereby, if Jio can effect mass adoption of 5G technology through country-wide infrastructure development and manufacture high-quality budget smartphones to support it, the mobile gaming market in India is expected to grow even more.

Jio’s entry to the Indian gaming market is also bolstered by its engagement in the country’s esports scene. Following the Indian government’s ban of Chinese-related apps, which include the most popular esports title in the country, PUBG Mobile, Jio jumped in the vacuum and hosted tournaments of PUBG Mobile’s main rival, Free Fire. In 2020, Jio hosted major Free Fire tournaments including JioMart Gameathon and Free Fire Gaming Masters. Its success in this space isn’t guaranteed at this point as the company is still in the exploration stage in regards to esports.

Reliance Jio has the potential to support the development of India’s gaming market. Although the company is not currently very active in the Indian gaming industry, Jio has plans to expand into 5G infrastructure, smartphone manufacturing, and creating a more comprehensive digital ecosystem for the Indian populace, which could act as a catalyst to more growth for the country’s mobile gaming market. Furthermore, mobile gaming and esports can also provide Jio’s digital empire with a steady and growing revenue source, which is why we in Niko Partners believes that the Jio will increase its stake in the gaming ecosystem.

Jio’s plan to roll out 5G services in the second half of 2021 could pave a road for the gaming industry in India in the long run. Higher speed and bandwidth offered by 5G would increase download speeds, make gaming experiences more interactive, and support the game live streaming activities. 5G technology also offers lower response time which could help establish a cloud gaming ecosystem in India. India does not currently have a robust ecosystem for cloud gaming, but the introduction of 5G would equip game developers with the capability to handle arduous processing and rendering and thereby stream higher quality results for the players. Jio could expand its industry into the gaming scene in India in the near future. However, at the moment, its lack of experience in the gaming industry could be a big challenge to address for the company. Jio’s ongoing involvement in hosting esports tournaments and talks to cooperate with game companies might help the company to understand the environment and prepare it for a serious delve into India’s gaming industry.

2020 Investments in Reliance Jio

Note: Amazon is in talks to buy 9.9% of the stake of Reliance Retail, Jio’s sister company.

Author – Divya Somani