MUMBAI: Expected to grow at a rate of 18% by the end of 2010, Gaming is surely creating a buzz across the country. With sports gaming here estimated to be worth Rs.5.3 billion in revenue terms, everybody from telecom companies, to game developers and social networking sites see a huge potential in the Indian market.
Present market share of the Gaming Industry in India:
The industry is classified into 4 genres namely, online games which are browser based games, PC games, Consoles and mobile gaming.
Yashraj Vakil, COO, Dream11 Gaming Pvt. Ltd.
“The category which claims the highest market share is mobile gaming followed by online gaming that is available free of cost. It is increasing rapidly as the internet population is growing at a CAGR of 40% annually. There are between 2-2.5 million mobile games download a month in India,” says Dream 11, COO Yashraj Vakil.
“The Indian mobile gaming industry at an estimated size of INR 1.8 billion constitutes little over 5 percent of the total mobile value added services revenues,” says Zapak Digital Entertainment Ltd. VP-Product, Deepak Abbot.
“The rising number of wireless subscribers coupled with increasing penetration and affordability of data enabled handsets provides a large addressable market for the gaming industry,” adds Abbot.
The categories which account for the lowest market share are both PC games and Consoles. “The primary reason being consoles which are quite expensive, available at a price range of Rs.7000-8000 while PC games cost Rs.1500 and above. In comparison, a licensed mobile3D game is sold for a price of Rs.150 while a 2D game is available for Rs.50,” says Vakil.
According to the recent Pricewaterhouse Coopers research, the mobile gaming claims the highest share in the market i.e., 57% followed by online gaming which is 18%; the Console gaming that accounts for 15% and PC gaming that shares 10% of the market share.
“With a one time investment between Rs 5,000 and 20,000 for the consoles and an additional cost of Rs 1,000 to 3,000 for games, console gaming is an expensive proposition for an average Indian as compared to other modes of entertainment,” says Abbot.
Obstacles the industry faces and its solutions:
Gaming is a part of the entertainment industry and hence faces similar challenges. The foremost challenge is Piracy. Estimated to encompass more than 50% of the total share of the gaming business in India, piracy not only makes the games available in lesser time but also at cheaper rates than the original versions.
“Grey market is primarily for software and is huge in India and that is one of the reasons why publishers shy away from India. The other reason being the prices of games available in grey market are much cheaper than the original versions. Moreover, the games are available within the second day of their release as compared to the original versions,” says Vakil.
Another problem he states is that, “Generally, the publishers sell one master copy of the original game to the distributors and the copies are then replicated in India. However, these days government is taxing every single CD which is replicated. This increases the cost as well as delays the availability of the game by a month or two.”
“We can look up to China which has been taking major steps to overcome piracy. For e.g., they have created a new category of games called as the MMORPG which cannot be pirated,” he adds.
Pirated games in India are cheaper than their Chinese counterparts. A legal copy of the console game is available at a price of Rs.3000 while a pirated copy costs Rs 200.
Another challenge to the industry is the accessibility i.e., broadband speed and penetration.
“More the penetration of broadband across the country, the more it will help in expanding the gaming industry,” states Vakil.
Abbot feels delay in broadband too is a major hindrance to the expansion of the industry.
“Because of all these barriers, the industry is still young as compared to other countries. India is 5 years behind China and Korea in terms of content, acceptability, reach etc,” he adds.
Social Gaming: New Segment in the market
Social gaming is a new phenomenon in India. Generally played on social networking sites, these casual games are slow in nature and easy to play.
“People are slowly moving from hard core time consuming games to casual/social games which are generally slow in nature. The growth of social gaming is directly proportional to growth of social networking in India. For e.g.: Facebook has 18 million users in India, so you can imagine the number of people indulging in social gaming. This category doesn’t require any marketing and is purely product driven,” states Vakil.
“Almost 5-6mn people are already playing social games in India and it’s going to grow exponentially. Future will see localized social games being launched with local payment options. Currently Indians play only global content not specifically targeted to them and payment options are also targeted towards western audience,” says Abbot.
Social Gaming has an audience of the age of 25 and above and generally targets the female population.
The business model for games on social networking sites is through a micro payment module which is how the developers make money. Famous games like Farmville, Mafiawars etc make the gamers indulge in spending through mediums such as PayByCash.
Keeping in view the business social gaming is anticipated to generate, Zapak launched its gaming application on Facebook in June 2010. In less than 2 months they have made available more than 80 games live with over 150,000 players. Moreover, it recently tied up with 6waves wherein Zapak will be the marketing and payment partner for 6waves’ games in India. Making the transactions easier, Zapak will integrate all local payment options like credit cards, net banking, Zapak pins etc. to facilitate item purchases for their games to Indian users.
Gaming: Entertainment for all ages and socio-economic classes
Gaming has proven to be a source of entertainment to all age groups and socio economic classes because of the wide range of categories and sources it has in its ambit. It is emerging as a platform for marketing of films.
3 Idiots tied up with Zapak to launch a movie website that leverages on gaming and other innovative digital applications. Moreover, Amar Chitra Katha came out with a multi-user game called The Legend of Katha.
“Earlier the youth was passionate about music and now this passion has turned to gaming. Facebook has got everyone from a kid to a grandmother to get gaming. Brands and advertisers have realized the potential of gaming and have started incorporating it in their communication campaigns,” says Abbot.
For Zapak, the core TG for online gaming is between 12-25 yrs, whereas for mobile gaming it is between 15-30 yrs.
According to Vakil, a typical Indian gamer can be categorized into the hardcore gamer that will be restricted to the age group of 15-22, while the social/casual gamer which will be 22 onwards.
“Maximum business for the gaming industry is from metro cities like Mumbai, Delhi, Chennai, Bangalore etc. However, with mobile gaming any one and everyone who has a mobile can be a gamer,” he says.
“Gaming can be considered as the third pillar of entertainment. A lot of games have been inspired by movies such as Inception, Matrix and others. X-men started with a comic, then a movie and finally a game. Gaming completes the loop of entertainment. In a movie/comic an individual is a passive audience but in a game the consumer is himself/herself involved,” he adds.
Latest Trend:
The latest trend in gaming is the 3D gaming where you put on your 3D glasses and get a similar feel as that of a 3D movie.
“One can actually feel oneself running on the field playing football. Nvidia has already launched 3D enabled games,” says Vakil.
“3G that is expected to launch in India early next year will provide better quality games and at a faster speed. 4G which might come in 1-2 years will provide 24/7 continuous access to internet anywhere across the country,” says Vakil.
Abbot thinks gaming will be the no. 1 activity on SNS in the next 12 months.
“Motion Gaming is another new trend in console gaming market,” says Abbot.
Expected rate of growth:
The industry is growing at a CAGR of nearly 18 percent over 2006-2010. Developers’ costs account for around 25-30 percent of revenues. The mobile and online gaming segments are expected to grow significantly at CAGRs of about 30 and 25 percent respectively, through till 2010.
“In the next 3 years, the gaming industry is expected to grow at a rate of 100%,” says Vakil.
Abbot says, “The industry is expected to reach Rs. 31.9 bn in 2014.”
At present US and Europe remain the biggest markets for outsourcing animation and gaming related activities. However, the present scenario implies India will follow the dominants in becoming a centre for outsourcing.
