Information Technology

Jun 14, 2007
Games are not child’s play

Sufia Tippu

BANGALORE -- Games people play. And even games people create. Both are extremely relevant and crucial when one starts writing about the gaming industry in India. While the number of people (reading the young and hip set) who have taken to gaming is zipping in India, it is only heartening that there are a large number of software companies that are creating gaming software for global giants as well as tweaking them to dish out local fare.

“A lot of talk continues to be made about the overwhelming success of the global gaming market, with multi-billion dollar revenues that now outpace traditional entertainment moneymakers such as movie box office receipts,” says Mike Yuen, senior director, Gaming Group, Qualcomm in a recently-published report. In-stat/MDR expects that the Indian mobile gaming market , a segment of the overall industry will increase to US $336 million in annual revenue by 2009. A huge new market is waiting to be tapped where both money and technology are playing a crucial role.

Gaming is a two-pronged plus for India: the rising number of gamers and the growing breed of game developers. Let us talk about the gamers first and focus on the discernible shift from console and PC gaming to mobile gaming.

Mobile versus Consoles versus PCs

Gamers in developed markets took to offline console-based gaming in the pre-Internet days and it is only now that they are eyeing online games. Approximately 80 percent of spending on video game hardware and software takes place in the US, Europe and Japan, with only minuscule amounts coming from the rest of the world.

While console gaming is witnessing a full-blown war with Microsoft, Sony and Nintendo pushing the envelope with feature-rich video games, they face issues of expensive price points, distribution issues in non-traditional markets and piracy. While these issues are global, they definitely have ripples in India: high cost, non-availability of good quality games and the ability to latch on to pirated stuff being the major bugbears.

In fact, an Euromonitor report published in October, 2006, points out that the video games market in India has been growing steadily in recent years, which has prompted many experts to be bullish about this industry’s future prospects in the longer term.

But the aggregate numbers indicate that video gaming is yet to catch on with the masses and remains very niche, with most gamers in urban areas, the report points out. PC games still account for the greater part of the business in economic terms, and console games have not yet become established on a large scale.

On the other hand, deepening PC and broadband penetration, together with invigorated promotion have seen online gaming really taking off. As India’s middle class expands, home PCs and internet cafes are proliferating, millions of young Indians have more disposable time and income than ever before.

The head of an internet portal predicts that by this year, the number of internet users will more than double, possibly climbing as high as 100 million. Crucial for the growth of online gaming, 60 percent of these new connections will be broadband (defined in India as 128 Kbps and higher).

A Wired magazine report says that not a few of these new broadband links are found in India’s 100,000 internet cafes, which now derive between 30 percent  and 40 percent of their revenues from online gamers (July-August 2006 estimates). The growing appetite for gaming has led one internet cafe chain, Sify, to launch a broadband-only, gaming-oriented cafe brand called Game Drome, which both hosts and promotes local and national competitions.

However, leaving behind console and PC gaming, the biggest explosion has happened in mobile gaming in India. And not just that, this segment has the potential to grow the fastest. Qualcomm’s Mike Yuen feels that the future of the global gaming market lies with a wireless device due to its near ubiquitous accessibility. It definitely throws up an opportunity for India, where cell-phone users are expected to reach 180 million by 2008. Paradox Studios, a part of Reliance Infocomm, has 60 coders producing games for customers of its parent’s mobile phone franchise.

“I believe the forthcoming tidal wave of advances in the wireless device and its network will soon allow it to become a 'good enough' gaming console in regions such as India, China, Latin America and Russia. Together, these emerging markets represent an enormous untapped consumer gaming market that eclipses that of developed countries,” Yuen says.

Moreover, new research from Nokia reveals that mobile phone gamers are looking to the next generation of mobile gaming to meet their needs to easily discover, share and play fun and high-quality mobile games. The results found mobile phone gamers frequently play mobile games for an average of 28 minutes per session, value improved game graphics, prefer to trial games before buying, and find communities increasingly integral to their overall mobile gaming experience.

The gamers surveyed frequently play mobile games with the vast majority (80 percent ) playing at least once a week and 34 percent playing every day. The average length of a session is 28 minutes with India (39 minutes), US (31 minutes) and Thailand (29 minutes) playing longer than average.

Mobile phone games are played on the move (61 percent) almost as much as they are played at home (62 percent). Also, mobile phone gamers are making the most of their idle time with 56 percent  preferring to play while waiting.

“These research results further validate that consumers are looking to the next generation of mobile gaming to meet their gaming needs,” Jaakko Kaidesoja, director, games, multimedia, Nokia, has reportedly said.

The Development Byte

India has more than a finger in this lucrative pie. It has emerged as a key one-stop destination for game development. According to research firm AC Nielsen, the Indian gaming market was worth US $50 million by 2005, with console and PC gaming break-up of  US $35 million and US $15 million respectively. All the big Indian development companies have distribution and marketing partners abroad and 75 to 80 percent of their turnover comes in from the international market.

According to Outsourcing.com, a typical game title today takes around 24 months to make and will have a production budget of US $4-10 million. The gaming industry is under increasing pressure to reduce development time and the cost of production. Reason enough for major publishers and studios to look at outsourcing development.

This is where the Indian game developers step in. The Indian market has 4 to 6 large game development companies with 50 seats and more, while there are another 100-odd small game developers with 5 to 10 seats, which are dedicated to developing for the wireless. As with other software work, India’s low costs are behind the trend, though it’s also being driven by a shortage of qualified developers in the US and Europe, according to Adventis Corp., a Boston consultancy.

Outsourcing to India in this sector can be divided into three broad segments:

1. Computer games that are delivered on disks or CD- ROMs and played on a PC;
2. Video games that use dedicated consoles to play the game;
3. Wireless games market that is dominated primarily by games played on mobile phones

And, mobile gaming takes the cake here too. Gaming companies across India, says a BusinessWeek report, are trying to make their mark in the US $2.2 billion global business of providing games for cellphones. Although mobile-gaming development was just a US $100 million business in India in 2005, it’s growing at 50 percent a year and by 2010 could be worth US $500 million, according to Nasscom. And Indian companies could book an additional US $130 million meeting local demand for mobile games by then, up from the US $20 million in 2005, game makers say.

However, the downside for India as far as mobile gaming is concerned is that the work so far is relatively of a lower level. Few Indian companies actually design games; instead they concentrate on ‘porting’—tweaking the software code (and testing them too) to ensure that games work on the myriad phones and networks used by cellphone carriers.

According to the BusinessWeek report, there is a positive side too. The industry is gaining traction as foreigners set up shop. Los Angeles-based Jamdat Mobile Inc. opened a 25-person office in Hyderabad in December, 2005. MFORMA Group of the US has a team of 35 developers in Bangalore and expects to have 100 by 2006 end. Britain’s Babel Media has 20 staffers working in a testing facility near Delhi.

How Does It Work?

The distribution pipeline that extends from the IP owner to the consumer includes the IP owner, publisher, content developer, carrier and the consumer. There are also portals and aggregators that could be part of the distribution.

Usually game publishers identify properties around which they can have successful games. They then approach the owners of the desired IP and purchase the license. Next, they assign a developer the task of developing a game around their content. Once the game is ready, the developer is paid his development fees and the publisher then releases the game to its partners, which are essentially the carriers and portals.

The carriers and portals then offer the game to the consumer via down-loads, portals or consoles. The carrier and the publisher then share the revenues generated from consumers. A lot of developers are moving up the value chain by becoming publishers as well.

The Development Cycle

The development cycle for a game includes game concepts, scripting, programming, character design, animation, level making and testing. The cycle is divided into three parts: pre-production, production and testing.

Pre-Production: It involves concept art, game design and game dynamics. Production is final concept arts, modelling, animation and programming. Testing is the big task for game developers. There is a wide range of formats, platforms, carriers and handsets that the games have to be tested for. Typically, there are separate teams for porting and testing; some companies prefer to outsource this activity to specialised units.