Indian gaming industry is expected to grow at a Compounded Annual Growth Rate (CAGR) of 32 per cent to Rs 3,100 crore by 2014 with factors such as a young population, rising disposable incomes, increasing wireless users and proliferation of developers and publishers.
This has been revealed by a study carried out by Market Xcel, an end-to-end market research firm that provides custom market research solutions. The study was conducted across 12 locations in India including metro/mini metro towns – Delhi, Mumbai, Hyderabad, Bangalore, Chennai, Kolkata; and tourist destinations – Shimla, Dalhousie, Mussoorie, Kullu and Manali.
As per the study, the size of the Indian gaming industry was estimated at around Rs 790 crore in 2009, compared to Rs 650 crore in 2008, implying a growth of 22 per cent during the period.
The console gaming industry in India is expected to grow at a CAGR of 19 per cent from Rs 580 crore in 2009 to Rs 1,160 crore by 2014 on the back of increasing disposable income and favorable demographics. According to various industry estimates, there are about 300,000 handheld consoles in India and the segment is witnessing a year-on-year growth of around 35 per cent.
The focus is now on developing a talent pool and leveraging cost-competitiveness. India already offers a significant cost advantage in animation and game development, as compared to other outsourcing destinations such as Taiwan and South Korea.
A key factor restricting the growth of animation and gaming in India is the scarcity of skilled professionals.
According to an estimate, the typical Indian gamer is a male from the top eight metros, has an average age of 26 and belongs to the affluent section. The average gamer has been playing on an average since 18 months now. The average person plays games three times a week and his usual gaming sessions last an hour in length.
Gaming can be categorised into five main classes:
PC Gaming - Involves playing video games on a personal computer (PC). The advantage with PC gaming is that it offers rich multimedia experience and easy usability. Games can be played using storage devices such as CDs, DVDs or online.
Console Gaming – In console gaming, games are played using game consoles. Apart from a game console, it requires an output device such as a computer monitor or a television and an input device called controller. Some of the popular gaming consoles are Sony’s Play Station and Microsoft’s Xbox.
Wireless Gaming - Wireless gaming refers to the games played using handheld devices such as mobile phones, personal digital assistant (PDAs), etc.
Multiplayer Gaming - This involves playing games with other gamers (usually between five to 10 players), sometimes even with players in different parts of the globe.
Video Gaming - An electronic or computerised game played by manipulating images on a video display or television screen.
Factors behind growth
Demographics and Rising Incomes - India is a young country with over two-thirds of its people aged under 35, the primary target segment. This, coupled with the rising disposable incomes in urban India and the increasing consumerism, makes a good case for growth in the console gaming segment in the coming few years.
PC and Online Gaming:
• Increasing broadband penetration - The number of broadband subscribers in India has increased from 0.7 million in 2004 to 4.9million by September 2008 and continues to grow rapidly – this will help in driving online gaming
• Strong marketing and distribution - Mainstream advertising as well as the strong distribution network of gaming chains such as Reliance Webworld has attracted many young people in urban areas to PC gaming – such chains will continue to drive growth in the PC gaming segment in the future as well
• High customs duties and indirect taxes - These make legitimate console hardware and software about 40 percent more expensive than grey market imports.
• Release windows for popular games do not coincide with global launches: Early adopters and active gamers therefore turn to grey market imports and pirated software
Piracy: Piracy is and will continue to remain the biggest threat for PC games, because of ease of high street availability of illegal CDs at rock bottom prices. Moreover, with growth of broadband, downloading of pirated games through internet and P2P networks are likely to hurt the industry
According to the study, the key growth drivers are:
• Heavy advertising
• Games with relevant content
• Innovative distribution models
• Increasing broadband speeds
• Large potential segment
The current market share of India in global gaming industry is only about 0.6 per cent, but the growth rate suggest that India is going to have a significant market share in global gaming industry in coming years. Tier I and Tier II cities have been estimated to have highest growth rate in India.
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