How Indian gaming industry can get better at play

In the past decade, the gaming outsourcing market has flourished in India as foreign companies provided game development services to the country.

The Indian gaming industry touched $171.66 million in 2010, according to a FICCI-KPMG, Gyan Research and Analytics 2012 report.

The overall size of the industry in India included revenue generated from the consumer market, the service market and the non-development outsourcing services rendered to international gaming companies.

The report had estimated that the Indian gaming industry was expected to have a Compound Annual Growth Rate (CAGR) of 32.1 per cent in the next five years.

The estimation was based on the fact that the rise in penetration of personal computers and mobile phones will help the industry achieve growth.

Today, it has tripled the number, and touched worth of $543.08 million in 2016, according to the report ‘Emerging Trends in Indian Gaming Industry’. The report said the figure is expected to hit $801 million by 2022, at a compound annual growth rate of 6.61 per cent.

Where’s the growth coming from?

Three years ago, Ian Livingstone, co-founder of Games Workshop (creator of Total War: Warhammer, Mordheim: City of the Damned and many others) made his fifth visit to India, and was trying to get people to recognise the scope for growth and potential for investment in the country's gaming industry.

During the visit, Livingstone noted that the time has come for gaming companies in India to take the next step, with local players getting ready to change gears and create their own concepts.

“The gaming concept is changing in India with more developers coming with new concepts. These game developers come with the background of being gamers earlier. They see a lot of opportunity and are ready to pick a career in the gaming industry,” said Manvendra Shukul, Cofounder and CEO, Lakshya Digital. He is also one of the founding members of NASSCOM Game Developers’ Conference.

The company has offered services to many international gaming brands and helped them create games such as Counter Strike, Disney’s Epic Mickey - The Power of 2, TEEN’s DC Universe and many more; it was acquired by Dublin-headquartered Keywords Studios in 2014.

Mobile steers growth

Industry experts believe that with increasing penetration of mobile games, the Indian gaming market has an edge and, apart from reaching out to players and developers, can also think of creating more home-grown games and towards generating intellectual property.

Octro’s Teen Patti, a game based on a traditional Indian card game that has continuously appeared on the list of top five grossing games at India’s Google Play Store, is one of the many success gaming stories.

Nukebox‘s Food Truck Chef mobile game has also performed well. It generated more than 3 million downloads in the first 10 days, and the Indian developer said it is on track to make $500,000 revenue in its first 45 days.

Shukul added that mobile games don’t require as much money as console games, thus making profit easier. This is one the many reasons behind the mobile game development rage.

But, some experts feel that monetization is the key factor in mobile gaming which keeps the companies on their toes and makes them take desperate measures.

Where were/are the hiccups?

“There are three main ways through which a gaming company can make money - in-app purchase, ads and IP to brand extension,” said Ankit Rawal, VP - revenue, at GreedyGame. It is a platform for content creators to monetise their content through advertising without disrupting the experience of the users.

He, however, added that all three methods are extremely difficult in the Indian context, where users play to win than pay to win games.

Badri Sanjeevi, CEO, Mauj Mobile, a mobile media company that specializes in premium apps and content marketplaces, says mobile gaming companies are largely dependent on downloads and continuously struggle to generate revenue.

“This is saddest part of the industry, where studios keep shutting down owing to a cash crunch,” said Sanjeevi.

He also sees a large gap in the approach of Indian gaming companies, which is another reason behind the revenue crunch. There are a lot of me-too games in the market when the studios need to develop unique products.

“Besides, game development is a resource-intensive job, which demands both time and capital.  Even investors are dithering in making investments in gaming studios. These are the challenges which have made them juggle between creating own games and outsourcing,” said Sanjeevi.

What’s the way out?

Experts feel there’s no dearth of talent in the country for creating a great product. “There’s enough ecosystem to create the right kind of product and it just needs the right combination of entrepreneurs and capital,” said Sanjeevi.

Besides, despite challenges in the mobile gaming industry, there are some success stories as well. Some gaming companies have even drawn investors.

In 2012, HashCube, a Bangalore-based social gaming company raised investment from IAN and Blume Ventures.

In 2015, partnering with Blume Ventures, Flipkart funded Bengaluru-based gaming studio Mech Mocha as it attempted to make India play.

Recently, Nazara Technologies, a leading mobile game publishing company, saw success as it plans to launch a Rs 1,000-crore IPO by the end of the financial year.

The company is now looking to switch focus from casual mobile gaming to other platforms and become a broader ecosystem player in the space.

In February this year, Nazara Games committed to investing Rs 136 crore in its eSports venture over the next five years. It is also looking to actively pick up a stake in gaming startups - last month it invested in game development studio Moong Labs, with which it partnered to launch a 4D cricket game featuring Virat Kohli.