Indian gaming industry poised for tremendous growth
With an ever growing number of PC, Internet and mobile users, the Indian gaming industry seems to have tremendous growth potential. Industry players feels that if the demand-supply gap is met, India will be successful in developing games in-house instead of outsourcing them
Gaming is the new genre of entertainment and is making its presence felt in the Indian landscape aggressively. According to the Nasscom report on gaming and animation, the Indian gaming industry was estimated at nearly US$ 48 million in 2006; and is expected to cross US$ 424 million by 2010, representing a CAGR of 72 percent over 2006-2010.
Over the past few years in India, the gaming consumption has seen tremendous growth across all platforms PC (both online and offline), mobile and console (X Box 360, Playstation). But amongst them all, PC and mobile gaming has acquired the number one position in terms of acceptance and usage in the Indian market. The Nasscom report states that mobile and online gaming segments are expected to grow significantly at CAGRs of about 30 and 25 percent respectively, through till 2010. Console is another segment that will gain momentum in the near future.
PC and mobile games in demand
It is a known fact that PC has been the pre dominant market leader as gaming consumption is at the highest at home and at Cyber cafes. Most of the latest gaming titles across genres are available in the market and this segment is rapidly establishing itself. In the online space as well there are a whole host of sites that are fuelling gaming consumption.
Says Manish Malik, General Manager, Gaming Hungama, “Within PC, the most popular segment is the casual games segment. These games are web based games that are short session games packaged with a fun experience and appeal to a broader audience. Digital distribution of content is making it easy for the customers to access the same as soon he logs on to the web.”
On other hand, mobile games are becoming a big attraction, appealing to the masses in a big way. One reason being its availablity and reasonable price. The market for experiencing top quality games is expanding and users want to play more innovative and exciting games. Mobile gaming accounts for the maximum share in the Indian gaming industry and the trend is expected to continue.
“As per global estimates mobile gaming penetration in the Indian market is at 2 – 3 %. Gaming on the whole is witnessing progressive growth across all platforms i.e. PC / Console / Web. Mobile is the platform to make it scalable and sustainable,” explains Malik.
Most mobile game providers feel that games around top Hollywood and Bollywood blockbusters are well accepted and have the potential to do well. Action and sports are the other genres that are also popular with the Indian gaming audience.
Salil Bhargava, CEO, JumpGames says, “Mobile gaming revenues in India, as reported by Gartner, are expected to reach a whopping US $450 million by 2012. The market has also seen a lot of growth in terms of new network providers being added to the existing list. Though content discovery still remains one of the biggest hindrances for the growth of gaming in India, subscribers are taking on to gaming on their phones like never before.”
In terms of content, simple, easy-to-play games remain the audiences’ favorite. There is also a craze for branded content. For instance, JumpGames launched games based on Bollywood like Bipasha Basu Jet Ski Champ, Malaika Aqua Diva and Bappi Da Disco King that are going strong. Racing and sports titles, mainly cricket, also remain an all-time favorite. JumpGames recently launched a cricket game called Ishant Sharma Cricket Fever, which is also quite popular among audiences.
“The current share of mobile gaming is 58%, followed by PC gaming and online as 27% and 15% respectively,” states Bhargava.
With the large reach of mobile phones and newer handsets coming into the market mobile gaming will show a strong growth. In addition the growth of broadband and a focus on data services by telcos will drive the growth of this industry. The advent of next-generation cell phones and PCs with competitive multimedia and gaming capabilities are a great potential for mobile gaming in India. For instance, touch screen phones such as the I Phone and cell phones like Android and the N Gage phones with wi-fi capability will give mobile gaming the boost it needs.
Consoles – The big opportunity to play
At last there are devices in the market which provide a complete gaming experience and will help the market grow organically. They are called console gaming. There are 3 major platform owners namely Microsoft (X Box – 360) Sony (Play station – PSP, PS2 & PS3) and Nintendo (DS, Game Boy, Wii-Yet to be officially launched in India) which are providing the complete entertaining experience to the consumers.
Currently, the mobile and console gaming together contribute nearly 77% of the total gaming market in India. The increasing mobile and broadband penetration along with the introduction of new generation consoles is expected to lead to the shares of online and console gaming in the domestic gaming market increasing significantly by 2010, states Nasscom analysts.
AMD has introduced the world’s highest performing graphics cards – the ATI Radeon 4800 series and claims that the ATI Radeon HD 4850 and ATI Radeon HD 4870 cards are more powerful than any generation of video game console ever brought to market.
“Most of the latest Game studios are creating compelling content across genres and consumption is on the upswing across US and European markets. In the Indian scenario there are issues of piracy and pricing but Consoles are becoming the next hot selling gizmos in the market,” feels Malik.
Does India have opportunity for developing games?
India, with its cost-effectiveness and availability of skilled resource pool is already a preferred destination among the global players. Now, with prestigious international developers setting up local development centres, the scope of opportunities is simply vast.
In mobile gaming outsourcing of end-to-end game development also happens in India, currently, though on a small scale. Indian companies are also developing mobile games for the growing domestic market.
According to Nasscom, the worldwide gaming content market (developers’ perspective) was estimated at nearly US$ 7 billion in 2006 and is expected to cross US$ 13 billion by 2010, a CAGR of about 17 % over 2006.
Currently, there are nearly 150 gaming companies in India, employing about 2,500 people. This number is forecasted to increase at a CAGR of over 50% to exceed 13,000 by 2010, with the industry revenue forecast to growth nearly tenfold and reach US$ 424 million. This is significantly lower than the estimated potential of US$ 732 million that the Indian gaming industry can achieve by 2010 – if the supply concerns are addressed in time.
Nasscom identifies some of the predominant factors causing the demand-supply gap, which include the lack of creative/gaming culture, lack of awareness / recognition for career prospects in this segment, and the absence of well-known training institutes/educational institutions.
But several leading players have undertaken initiatives to train the talent pool available in India to create the required supply of suitable manpower. As a result, a majority of the professional talent existent today is a product of these company supported internal training programs.
Going by the current growth rate, the gaming industry has tremendous scope for employment. The report also predict that there will be a significant increase in the number of Indian companies adopting a co-production business model (from an outsourcing model). Shift to the new business model would prove fruitful for the industry as the new model would drive motivation of industry players and compel them to perform bigger and better business. This, in turn will have a direct effect on the resource pool required to sustain the industry.
Explains Salil, “As far as the talent pool is concerned, India has emerged as a strong destination for gaming services. Offering significant advantages like ready availability of skills set, cost-effectiveness and sound infrastructure, India is commanding a strong position on the global scene.”
Malik also agrees, “There are new studios coming up in India and I feel that we have the necessary talent and ideas to create breath taking content that will appeal to the international level. However very few companies are experimenting and creating new IP as the focus is more on outsourcing work.”
Raj Bhatt, Sales Head, ATI and chipset, AMD India feels, “Game developers worldwide are always looking out to provide the most compelling engaging entertainment experiences ever. However, there are also limitations in video games. They don't perfectly match the visual impact of cinematic realism. If you look at how games have progressed over the years, in each genre, the content directors want to take the experience to that next level, but until today, they just didn't have the technology.”
However, with AMD’s recent launch of high performing graphics processor, the company is bullish about the Indian gaming developer industry. The company is also collaborating with movie directors and game developers, as well as software developers making the tools to harness many teraFLOPS of real-time visual computing power.
Emerging games
Emergence of better mobile technologies and platforms should make way for richer game experience on mobile in times to come.
Salil Bhargava feels that social communication on the mobile has been one of the most popular trends in the global arena and will remain so. Network-based gaming and connectivity features like Instant Messaging in games are also likely to drive the market significantly.
“Location-based games along with social networking games and applications should climb up popularity charts. Content needs to be simpler and more casual games like one-button genre are also strong contenders for emerging mobile content. With more and more brands lapping up to gaming, advergaming will also be one interesting trend to watch out for,” he adds further.
Malik of Hungama says, “On websites like ours, we create a lot of original IP around Bollywood and other topical events which goes down well with the customer. I see a lot of new IP getting created around branded content which will be the growth area. Otherwise the international titles will tend to dominate consumer mindspace.”
Challenges surrounding Indian gaming
Though the opportunity looks very lucrative, there remain few hurdles with the gaming industry in India.
Salil Bhargava feels that there are challenges with regards to the platform in itself. One of the prime challenges is the handset compatibility with a wide array of mobile devices varying from extremely low-end devices to the latest model. Designing a game to cater to all of them simultaneously is a challenging task. Then there are technological limitations as well as operator-driven constraints that are some evident roadblocks in the industry.
“In addition the biggest challenge of the mobile gaming and VAS industry in India is the discovery factor. People want games and content but do not know where to access them. A lot of effort needs to be put to educate the consumer on game and other content discovery,” adds Bhargava.
Malik feels that consumers need to upgrade to better quality handsets to enhance their gaming experience. Most of the handsets in the mass market are of lower quality which does not do justice to the innovative content being created. Pricing has to be extremely competitive and consumer friendly to drive consumption.
The challenge exists with over 1000+ handsets to support today and 400+ handsets getting launched every year.
Future looks bright
Once these challenges are met successfully, Indian gaming industry will witness tremendous growth. With more and more audiences tuning into gaming, there will be an increasing demand of quality content. The audience is maturing with regards to what they want to play as opposed to simply accepting what is served to them.
“In terms of the reach, the mobile handsets have to penetrate even to the remotest areas in the country. In a country with more than 116 million mobile users and roughly 3.6 million PC users - assuming these figures are going to have significant growth - reach should not be a restraint,” says Bhargava.
In addition, the growth of broadband and the focus on data services by mobile operators have driven and will continue to drive the growth of this industry. This is a trend which has happened worldwide and India isn’t too different. With the large reach of Mobile phones and newer handsets coming into the market mobile gaming will show a strong growth in next two years, followed by PC and console gaming.
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