India’s ban on Chinese video games proves to be a double-edged sword


It is the year 2500. The Indus Valley civilisation, which started on the Indian subcontinent more than 5,000 years earlier, is so advanced it has migrated to another universe where it has thrived for millennia, undisturbed by outsiders.

But an international criminal syndicate has set its sights on its home, sending mercenaries from around the universe to compete for its precious natural wealth — all while annihilating each other with an array of weapons that make AK-47s and grenades look like child’s play.

Such is the set up for Indus, an upcoming game from Indian studio SuperGaming. The “battle royale” title, in which online players fight to the death, is replete with motifs from Indian culture, from the Taj Mahal to the Hindu Ramayana poem. It presents “an optimistic India through the lens of sci-fi”, said Rishi Alwani, one of the writers.

Since 2020, New Delhi has banned a series of wildly popular battle royale games as part of a bruising crackdown on Chinese tech on national security grounds. Games from Tencent, Singapore’s Sea and Krafton of South Korea have all been restricted over alleged China-related security concerns.

In their absence, studios and investors are turning to a new crop of locally made shooter games like Indus to try to fill the void. But critics said that the government’s unpredictable, heavy handed approach is holding back the sector.

“The only positive I see from the games getting banned is that Indian studios have started developing battle royale,” Anurag Khurana, a veteran executive and founder of esports company Penta, said.

“The biggest negative thing is that the foreign publishers are afraid to make investments in India — they don’t know whether their game might get banned.” 

A scene in Indus showing a character in free fall, diving into a lotus-shaped structure
Gaming in India took off after 2016, when a telecom price war dramatically brought down mobile data prices © SuperGaming

Redseer Strategy Consultants estimates that 450mn Indians played at least one game last year and valued the industry at more than $2bn — though much of that comes from games involving real money, such as online rummy or fantasy sports.

Before its most popular game was banned, Krafton had invested $100mn in India. Meanwhile, SuperGaming last year raised $5.5mn in Series A funding from a handful of foreign funds. Yet executives said the uncertainty means investment in the sector continues to lag.

Gaming in India took off after 2016, when a telecom industry price war dramatically brought down mobile data prices. With computers and consoles unaffordable to most Indians, the industry is heavily geared towards smartphone games. This left Chinese companies well placed to grow, thanks to games optimised for low-cost handsets.

Deteriorating relations between New Delhi and Beijing, after a deadly clash on their Himalayan border in mid-2020, sparked a wide-ranging crackdown on Chinese tech, with hundreds of apps including TikTok and Tencent’s popular PlayerUnknown’s Battlegrounds (PUBG) banned on grounds that their harvesting of Indian user data posed a national security threat.

That was followed this February by a ban on Free Fire, which according to analytics provider was the second-most downloaded game in India, prompting an immediate 20 per cent drop in parent company Sea’s US-listed shares. In July, India ordered app stores to take down Battlegrounds Mobile India, a relaunched version of PUBG published by Krafton, which had said the game had attracted 100mn users.

While authorities did not explain why they targeted Sea or Krafton, neither of which are Chinese, both count Tencent, China’s second-most valuable company by market capitalisation, as an investor. Ranjana Adhikari, a partner at Induslaw in Mumbai, said their games appeared to be restricted on similar grounds to PUBG in 2020.

Column chart of Trend by segment ($bn) showing Real-money games dominate Indian gaming

The companies have denied that their data collection represents a security concern. Krafton’s chief financial officer Bae Dong-Geun said on an earnings call in August that the company would “closely co-operate with the authorities” to bring back BGMI.

The loss of three beloved games in as many years has left many Indian gamers distraught. “Really comes as a shocker,” Naman Mathur, a 26-year-old esports star known as MortaL, tweeted after BGMI was removed from app stores. “People who HOPED, will remain hopeless.”

“Esports players really got screwed,” Penta’s CEO Khurana said. “They can’t switch from one battle royale to another battle royale overnight . . . If you ask [cricketer] Virat Kohli to play football, it won’t work.”

SuperGaming and other Indian developers hope that their new generation of “made in India” games will help fill the void, and that the use of Indian themes will resonate more with players.

“We’re trying to make bigger, more ambitious games for an audience that cares and matters,” Alwani said. “Where’s the Indian equivalent of a Zynga, Ubisoft or [Electronics Arts]? They don’t exist. The first step is to let people know that games are made here.”

Vishal Gondal, whose nCore Games is developing a Battle Royale shooter FAU-G (a play on the Hindi word for soldier), acknowledged that turning India into a world-class gaming hub will take time. “The real power would only be seen in the next few years,” he said.

India is now preparing new gaming regulations that Adhikari says should bring more clarity to the industry.

But in the meantime, many gamers are still hoping that BGMI and the others will be relaunched after addressing security concerns.

“The Indian gamer isn’t going to stop playing games because these games were banned,” said Ashwin Suresh, founder of Krafton-backed live game streaming platform Loco, adding: “I think the games will be back.”


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