THE GAMES INDUSTRY IN INDIA INDIA: AT A GLANCE


MCV India editor Sameer Desai provides an overview of the market: There’s been a lot of buzz around the Indian game development industry over the last year or so. The country’s fast-growing mobile userbase and the rise in smartphone sales have seen studios mushrooming all over India in pursuit of ‘the next Angry Birds’. That was a common phrase heard around November’s NASSCOM Game Development Conference, which painted a rosy picture of where game development in India was headed. However, India has yet to create a single game to garner international acclaim, and the only Indian gaming companies known abroad are those that specialise in outsourcing services. Yellow Monkey Studio’s Huebrixis the only Indian game to stand out in recent times, and although sales didn’t match the team’s expectations, the puzzler received a positive critical reception internationally.


Specialist video game retailers are popping up both online and off. Game4u and Games the Shop have stores across several major cities in India, and large format retailers such as Landmark are showing renewed interest in the gaming segment. We’ve also recently witnessed the launch of India’s first digital games


according to Anand Khemani, CEO of distributor E-xpress Interactive. “India is a price-sensitive market,” he explains. “The lower per capita income, plus all the taxes and duties, push costs further and make the SRPs steeper. We have worked on very thin margins this year trying to achieve the best possible SRPs so that the market can grow. “We work with the government bodies and custom authorities to bring the situation on their radar.” Home consoles are still a small force in the market, while mobile gaming has become very popular. Despite smartphones being too expensive for most consumers, the penetration rate of Java means there are plenty of opportunities in the sector. In fact, EA generates $4m to $5m per year through mobile games in India.


There is also growth in the world of social gaming, with more than 40 per cent of Indian Facebook members using it to play games. Research suggests India could become one of


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service from Game4u. Downloads4u is still in beta and its catalogue limited, but it’s the first indication of India taking note of international trends. India is a long way away from openly


“


FIFA 13 launched with long lines and packed stores, the stuff we only read about in the Western press.


Sameer Desai, MCV India


adopting digital distribution though, thanks to the poor broadband infrastructure. Retail remains king, and is likely to stay that way while the PS2 is still the best-selling console. A by-product of all the enthusiasm around retail has been the midnight


launches we’ve seen for big releases like Max Payne 3, Assassin’s Creed III and Hitman. None of those compared to the reception FIFA 13received though: long lines and packed stores, the sort of stuff we’re used to only reading about in the Western press. The downer is the issue of pricing. While prices are expected to drop towards the end of a console cycle, both hardware and software prices in India have been steadily on the rise. Microsoft recently hiked the price of the Xbox 360, while Sony released the new 12GB variant of the PS3 with no reduction in price. Game prices are also up significantly thanks to the weak Rupee and unfavourable changes to customs duty regulations. This should be alleviated partly with Sony set to begin manufacturing PS3 games in India soon. These price hikes strengthen the brand-loyal behaviour of the Indian gamer. New IPs rarely stand a chance in the market. FIFA was unsurprisingly the biggest seller over the last six months at Flipkart – India’s largest games retailer, but in second place was GTA IV, a 2008 release. GTAis a massive franchise in India, but these GTA IV numbers four years after release are a sign that new gamers aren’t just playing Angry Birds.


ANALYST’S OVERVIEW by Chris Stanton-Jones


PREVIOUSLY a niche market within Indian culture, gaming is now becoming higher profile. Key factors driving this include the


entrance of many casual gamers starting on mobile or online games, lower-priced consoles bringing in lower-income consumers, Indian- flavoured software, and the introduction of family gaming via Kinect and Move. Organised retail continues to grow and the top seven accounts now make up around 30 to 40 per cent of all software business. The largest accounts are still Croma, Planet M, Landmark, Crossword and Reliance Retail. There are a growing number of dedicated gaming stores, particularly those managed by local distributors. Games the Shop (run by E-xpress) and Game4U (run by Milestone) are two of the largest and both have seen good growth in recent years.


Midnight launches for major games are becoming more commonplace in India “


We have worked on very thin margins this year trying to achieve the best possible SRPs so that the


market can grow. Anand Khemani, E-xpress Interactive


the Top Five countries in the world for social gaming in just three years. And while poor broadband hinders progress, there is growing demand for digital games and content. “With digital era around the


corner, there is a shift in buying boxed products from brick-and- mortar retailer to online stores,” says Milestone CEO Jayont R Sharma. “It will not take much time in shifting from buying physical games to buying the content digitally at a better price.”


There is also significant growth of number of games sold via e-tailers, which now represent roughly five per cent of the market. This has grown substantially from a previously low base – no more than 0.5 per cent in 2009. India is a cash-based society, so e- tailers offer payment on delivery, as well as free delivery. Some of the best known companies are Flipkart.com (the ‘Indian Amazon’) and Game4U.com (owned by distributor Milestone). The software market is still growing but at a smaller rate than in previous years. The large growth experienced in previous years – averaging at 40 to 50 per cent – has been tempered by a stuttering economy and general consumer buying caution. A blockbuster PS3 title can now achieve over 10,000 unit sales, with the lifetime ceiling fast approaching 20,000 units for the biggest titles.


CATAPULT BUSINESS SOLUTIONS


This consultancy company helps games firms grow their businesses in emerging markets. 020 8898 4594


chris@catapultbusiness.co.uk December 7th 2012 25


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