Gaming is still in its infancy

Written by Ganesh Natarajan | Ganesh Natarajan | Updated: Nov 12 2012, 06:44am hrs
The most interesting aspect of the IT industry today is not just whether TCS at 44 % revenue growth this quarter and a market capitalisation higher than the next three IT companies put together can be caught by any of its competitors in the immediate future, intriguing though that question may be! The real story lies in the multiple adjacent industries that are all emerging from under the shadow of IT services, sprouting wings and flying to find their own place in the sun!

Inaugurating the recent Game Developer Conference in Pune recently, it was interesting to find 800 enthusiastic youngsters packing the hall and listening to experts talking about the state of the industry as well as the myriad

opportunities that await ambitious new game development companies. However a word of caution here. While the other segments that sprouted in the industry, business process management, engineering services, global captive centres and even product companies are all approaching critical mass, the game development business is still in infancy in our country and we have a long way to go to aspire to be at the level of even a China and Korea in the gaming industry. At a $300 million revenue level, the size and scale may be small today but the rapid proliferation of the internet and the capability enhancement of mobile phones at a rapid clip are both catalysts for rapid growth and increasing attention share for this exiting segment of Indias IT industry.

An industry that has hitherto been dominated by console gaming, a trend that never really took roots in India, is now migrating towards on-line gaming and mobile gaming, both of which present substantial opportunity for Indian entrepreneurs in search of a new game to play! With broadband penetration increasing at a healthy rate and cybercafes doubling as gaming parlours in various parts of the country, the long missing domestic demand is expected to revive with a vengeance. The favourable demographic in India should also serve as a boost for the industry as the countrys youth forsake their cricket and movie channels on television and become serious gamers!

We do not have to look far to understand the potential of the gaming industry. Asian game market analysis company Niko Partners predicts that the online gaming market in China alone will be worth over $6 billion in 2012 with the Free To Play business model encouraging many casual gamers to become money spending gamers on the net. The home channel is taking over as the premium spending medium from the erstwhile internet cafes where maximum spending would take place earlier. In a neighbouring market, South Korea, the local mobile game market is rising at over 50% per year and is expected to cross $500 million by 2014. It is no surprise that the rapid proliferation of LG and Samsungs smart phone portfolio is credited by Nomura to have been a spur to the rapid growth of this market. These are the dominant catalysts for India as well.

Gaming has come a long way since the times in the mid-nineties when the only game with some pretensions to local popularity was Stump Vision a cricket game created by cricketer Anil Kumble which we actually installed at Aptech centres to entice youngsters to join computer courses. Even if most Indians have missed the console gaming craze, the new generation of online and mobile gaming will be embraced by young and old. What is needed is an abundance of local content and at least one runaway success in the near future to get young and old hooked on gaming and a thousand entrepreneurs to bloom to create and upload ten times as many games as area available today.

The excitement that was palpable among the games developers in Pune is just symptomatic of the opportunities that lie in front of those who are willing to choose the road less traveled. The 25% plus growth that every significant software services company expects to achieve this year with some help from currency is a sure indicator that the core business is going strong and many business process management majors share the same confidence about the future. The fact that Nasscom remains at the center of this universe and has managed to keep all the mercurial planets like gaming, engineering services and products harnessed to the gravitational pull of its industry eco-system does credit to the leadership of this outstanding association. There will be many new challenges that Nasscom, the industry players and the entire Indian economy will face in the turbulent years that lie ahead. We are a resilient industry and will continue to thrive!

The writer is vice-chairman & CEO of Zensar and chairman of the National Knowledge Committee of the CII