The Animation, Visual Effects, Gaming and Comic (AVGC) sector will set up a promotion task force with all stakeholders to recommend ways to employ youth and build domestic capacity for serving Indian markets and the global demand, Finance Minister Nirmala Sitharaman announced in the budget 2022 speech on Tuesday. As per the Confederation of Indian Industry (CII)-The Boston Consulting Group (BCG), India has less than 10% of the global market share in VFX and animation.
It has been some time since the government has been eyeing the growth rate of this sector. The Ministry of Information and Broadcasting (MIB) in 2020 announced that it will establish AVGC Centre of Excellence (CoE) on the back of the belief that gamification and animation will become a major export for the country and a wealth generator. Following this promise, the first AVGC CoE was launched in Bengaluru last month. This year, MIB has been allocated a total of Rs 3,980.77 crore by the government.
To give perspective, the Indian gaming industry is generating $1.5 billion in revenue and is expected to triple this to over $5 billion by 2025, according to BCG-Sequoia India report 2021. Meanwhile, the Indian media and entertainment sector is expected to grow at a nine to eleven percent compound annual growth rate (CAGR) to reach $55-70 billion by 2030. The growth is estimated to be driven by over-the-top (OTT) platforms, gaming, animation, and VFX.
Let’s see how the industry stakeholders are reacting to this announcement by the Finance Minister.
Jehil Thakkar, partner, and media and entertainment sector leader, Deloitte India
The setting up of the AVGC (Animation Visual Effects, Gaming and Comics) promotion task force announced in the Union Budget will help India achieve its potential of achieving 20 lakh jobs according to Deloitte projections. These are critical skills for growth of the metaverse and India is poised to take advantage of this ecosystem.
Vishwalok Nath, director, World Esports Cup
We hope that this task force can help promote the creation of a robust infrastructure for game development with gradual benefits to the esports community. There is a huge scope of employment for the youth in the gaming industry, Esports/Video Games is a versatile industry and there is a huge scope for professional gamers as well as other jobs like casters, commentators, and other support staff appointed by the esports tournaments like producers, editors, analysts, product managers, game testers, referees, production crew members, event managers, social media managers, among others.
Neeraj Roy, founder and CEO, Hungama Digital Media
This is a budget that is welcoming web 3.0, the Indian government has been at the forefront of digital adoption, via earlier initiatives such as Digital India, StartUp India, among others, and now with the introduction and recognition of ‘virtual goods or digital assets’, the initiative of a task force for Animation, Visual Effects, Gaming and Comic (AVGC) and even the introduction of a digital bank that would embrace the blockchain, it is there way of ushering in a New India into the Metaverse. We welcome these announcements and look forward to setting a place of leadership for India in web 3.0.
Lokesh Suji, director, Esports Federation of India, and vice president, Asian Esports Federation (AESF)
It is encouraging to finally see the seriousness from our government towards this sector which has been long neglected. This will definitely help in setting up the policies which would encourage and build our capacities and capabilities to export to the rest of the world; leading to more domestic video game development studios and more investments in the AVGC sector. Spectrum auctions for 5G is a welcome move for the gaming industry as well, 5G can disrupt the industry by enhancing the live streaming of games and cloud gaming as well.
The task force should consist largely of people who have been part of the “Video Game” industry and are playing an active role in shaping up the Indian video game industry.
Sagar Nair, co-founder and CEO, Qlan, The Gamer’s Social Network
It is this continued acceptance that will lead to the progress of the Indian gaming and esports industry. First was esports’ entry in the Asian Games as an official event followed by a government-dedicated task force to work with the AVGC sector. I have no doubt that these initiatives as part of the national budget policy highlight the true potential of the Indian gaming and esports segment not only in India but also on the global circuit.
The statement clearly indicates the backing of homegrown game developers, tournament organisers, and esports companies and recommendations from the appointed task force will help build domestic capacity for serving out markets and the global demand as well.
Manish Agarwal, CEO, Nazara Technologies Ltd
India presently commands around 10% of the global AVGC market and has the potential to reach 20-25% by 2027. This taskforce will facilitate employment for the youth, build domestic capacity to serve the Indian markets and also meet global demand. Furthermore, replacing the Special Economic Zone (SEZ) Act with new legislation that would enable states to become partners in becoming development hubs is a crucial and well-timed move. For the gaming industry, such partnership with states on SEZs would help strengthen the supply base of animation and production studios and encourage development of the existing animation and gaming capacity.
Rahul Tewari, chief financial officer, Games24x7
AVGC taskforce can provide the long-term policy impetus and bring together the various stakeholders to turbocharge the vibrant ecosystem in gaming and animation. India has a deep and very high-quality talent pool of developers and creative artists who will transform India into a global player in the interactive entertainment space in the coming years. We hope this paves way for regularity clarity for gaming. Finally, the commitment to roll out a 5G network in the next fiscal year is a very promising announcement for the tech start-up space in general and gaming in particular.
Ankur Singh, CEO and founder, Witzeal Technologies Pvt. Ltd
The initiatives proposed to be undertaken by the Government to propel the growth of the economy in this budget are very encouraging. We see that Government has also identified AI (Artificial Intelligence) as an area that would offer employment to youth, this would be a definitive component of gaming industry. Moreover, the move to set up a task force to build internal capabilities to cater to domestic and international demands will help provide the much-needed push to gaming companies and developers
Kunal Lakhara, CFO, Pocket Aces
This budget has paved the path towards reviving the economy with the decision to keep the fiscal deficit pegged at 6.4% of GDP in 2022-23. The tax benefits offered for startups, by extending tax redemption for another year is much appreciated and will further encourage the start-up ecosystem of the country to grow and sustain their businesses while recovering from the pandemic. The startup sector growth coupled with the promotion of AVGC is bound to create a multiplier effect for the economy through the creation of jobs and overall increase in GDP.
P R Rajendran, co-founder and CEO, Next Wave Multimedia Pvt. Ltd
Gaming as an industry has been gaining traction in the country, especially with the digital push over the last few years. AVGC primarily being creative content creation, is human capital intensive and cannot be automated, and are excellent for job creation. The announcement of an AVGC promotion task force is a welcome move for the industry as it will provide means to the new talent in the industry with direction and opportunities and in turn, cater to skilled manpower needs in the gaming space.
Vaibhav Odhekar, co-founder and COO, POKKT
The Indian gaming industry is growing at an exponential scale and giving the long-due recognition to the Animation, Visual Effects, Gaming and Comic (AVGC) sector is a welcoming move. We believe this proposed move of creating a new task force will entice young professionals, creating job opportunities and drive economic growth. The initiatives proposed are steps in the right direction, however we will wait for concrete steps to be taken by the government.
Dilsher Singh Malhi, founder and CEO, Zupee
The digital technologies and allied sectors are elated about the announcement that 5G will be rolled out this year as it opens up massive opportunities for gaming, education, entertainment, and other sectors. For gaming companies, many of which are homegrown startups, the extension of the existing tax benefits from three to four years will further accelerate growth in the sunrise sector. The industry, which is already expected to have 657 million users by 2025, should now look to break the billion-user barrier by 2030. We are happy to learn that the Government of India and the Ministry of Finance understand the tremendous employment and revenue generation potential that the animation, visual effects, gaming, and comic (AVGC) sector has. The creation of the AVGC promotion task force is a welcome move. The initiative with industry participation will help in establishing uniform, progressive policies that will promote growth and investments in the sector, which in turn, will lead to job creation, revenue generation, and engagement opportunities.
Girish Menon, partner and head, media and entertainment, KPMG in India
The Budget 2022, from an M&E perspective, provides an emphasis on further strengthening India’s digital infrastructure through clarity on 5G auctions, and start-up ecosystem; proposes the formation of AVGC taskforce to address domestic and global demands and, commits to 200 TV channels to foster digital education, especially amongst the rural areas, and envisages to foster growth of micro transactions through the proposed Indian digital currency.
Harsh Jain, CEO and co-founder, Dream11 and Dream Sports
The task force for promoting the Animation, Visual Effects, Gaming and Comic (AVGC) sector will provide the much-needed clarity and certainty for the fantasy sports and Esports sectors by providing more upskilling and career opportunities for the youth to be a part of India’s sunshine sectors. The rollout of 5G services will further accelerate the adoption of online sports engagement platforms and promote investments, innovation and wealth creation.
Anwar Shirpurwala, CEO, Federation of Indian Fantasy Sports
As a fast-growing industry, fantasy sports has created an economic impact driven by its size and scale. Over the next few years, the fantasy sports industry is capable of cumulatively contributing Rs 11,000 crore in taxes including GST and TDS to the government exchequer, attracting Foreign Direct Investment (FDI) worth over Rs 10,000 crore and creating 12,000 additional jobs by generating employment opportunities for individuals skilled in fields like graphic design, motion design, creative writing, storytelling, user experience researchers, data analysts, software programmers so on and so forth. The budget announcement aligns with the growth of this emerging industry. Having said that, we look forward to 2022 to cater to the need for regulations through holistic policy guidelines for its long-term growth and sustainability to compete on a global scale.
Roland Landers, CEO, The All-India Gaming Federation
I am pleased that the government has announced a progressive budget; stating the gaming industry as a sector that generates various job opportunities for the youth while boosting the economy of the country. The ideas proposed for the sector are very encouraging. We are looking forward to the AVGC task force that will give a major boost to the game development sector by building scale and adding to the overall online skill gaming industry’s momentum. AIGF and the skill games council of domain experts will be happy to assist, if need be, in playing a consultative role for the same.
Varun Mahna, founder and CEO, Dangal Games
We feel that in the latest budget, the startup ecosystem has been given a great boost along with acknowledging the employment potential that creative domains such as AVGC sector hold for the youth. We are eagerly awaiting now for the recommendations that the AVGC promotion task force will be setting-up. We have always been great supporters for India’s Atma Nirbhar vision, and are committed towards enhancing our technological capabilities for serving the domestic and international demands.
Read Also: SBI Life unveils new brand identity