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Is branded integration the way forward for the gaming industry in India?

Gaming is a soaring sport, but engages less than 10 per cent of the people of India now. Changing consumer behaviour and better bandwidths could change the scenario, though

Archit Ambekar | Mumbai | May 11, 2016

Shravan-and-Sanjay-Kumaran Shravan and Sanjay Kumaran

Mobile gaming is no longer what it used to be a decade ago. It has changed drastically. The first crop of casual gamers have made way for a tribe of serious gamers, who love to explore all the features available when they play their game. The gaming tribe is a 100 million strong today ? which at the end of the day represents less than ten per cent of the 1.2 billion inhabitants of India. Even so, the business still has many untapped avenues.

Gamers fall into two categories, the first being the casual gamers who play a game for stress busting and the second in the list are the serious gamers. The serious players are highly engaged in the game and purchase as many in-app features as possible, but they only make up 20 per cent of the gaming population.

On an average, a casual gamer spends about 40 minutes a day playing, while an immersive, or serious gamer spends more than three to four hours a day engaged in the sport. An addicted user engages in gaming because it is highly interactive.

The entire scenario could change, however, with the increasing use of 4 G and better bandwidths. An evolving India of increasing purchasing power and more widespread use of plastic money could also tilt the scale in favour of game makers, as could smarter monetization models, like brand integration. A gaming success in recent times has been Nazara Games’ brand integration with biscuit manufacturer, Parle G.

Manish Agarwal Manish Agarwal

At the moment, though, the gaming space is fraught with challenges that don’t seem to fade away. Sharing his thoughts on the subject, Manish Agarwal, CEO, Nazara Games, said, “There are about three to four major challenges in this space. The first, is that the space is not well established. It hasn’t been sold well in the Indian scenario. The second challenge today is integrating a brand without ruining the user’s experience. Thirdly, one cannot dictate terms when it comes to gaming. Lastly, it takes about four to six months to make a game, which is a substantial time.”

Young game makers, Shravan Kumaran, President, Godimensions and Sanjay Kumaran, CEO, Godimensions, were of the opinion that monetisation was the real problem in the business. Indians want almost everything for free, but the gaming services entail substantial investment by the game makers.

The young brothers find the dice loaded against them in the business and rue the fact that such services cannot be well monetized. They are hopeful that the app market would witness a change in the coming years when players would be motivated to pay for content. “People are moving towards paying for music, so they will slowly move towards paying for games and in-app purchases. Free games will reduce on the app store as the market develops,” mused Sanjay Kumaran.

Whenever an ad is clicked on, the gaming site earns about $0.06, which is barely a dollar, making monetization doubly difficult for investors. A low penetration of credit cards in the Indian market is also impacting monetization of gaming as a business. With a mere 21 million credit cards in use in the country, the scope for a change in the gaming market was huge, assuming that consumer behaviour would change with time.

Srinivas Chilakalapudi Srinivas Chilakalapudi

Srinivas Chilakalapudi, Chief Strategic Officer, Green Gold Animation, said, “Ad based monetising is popular in India. Although one cannot recover one’s investment from it quickly. When brands look at integrating them in a game, as Parle G did with Chota Bheem, a different thought process goes into the making of the game.”

Chilakalapudi pointed out that a good game could be made within a budget ranging from Rs 2 lakhs to Rs 10 lakhs. The costs vary according to the game and the company. “And yes,” he said, “in India recovering the cost is a challenge.” Investors, he warned needed to be wise in making their gaming propositions.

Some gaming propositions do buck the trend, though. Recently, biscuit manufacturer, Parle G, associated with Nazara Games’ Chota Bheem Jungle Run. Agarwal elaborated on the strategic tie up with Parle G. In the game, the biscuit gave energy to Chota Bheem and the game became hugely popular with kids. The game consumed about 1.5 billion biscuits, which was adequate proof that the association was fruitful.

The animation industry works shoulder to shoulder with gaming sites in creating the games. P. Jayakumar, CEO, Toonz Animation India, said he was glad of the overwhelming digitisation and content consumption being explored on digital platforms. “Being the largest and the fastest growing kids market in the world, India holds a sustainable future in the animation industry,” Jayakumar said.

Animation is still considered a kids’ medium in India, which is not the case in the rest of the world. Another challenge for the industry is the inadequate availability of skilled man power, which makes quality production of animations a hurdle. The Indian animation industry doesn’t receive any support from the government, but in countries like Canada, New Zealand, Spain and China, the industry does get immense government support.

Jayakumar felt that integration of brands would increase with the consumption and production of local animated content. He said, “Since the last few years, brands are showing an increasing interest in integrating them at the animation space. Popular animated characters have been used to promote movies, events, commercials and various kids’ brands.”

Apart from monetisation, bandwidths are also a problem in India. Many games require players to be connected online. The heavy data consumption of games is one of reasons for the increasing instances of games being “uninstalled”.

Chilakalapudi, Agarwal and the Kumaran brothers were of the opinion that with the launch of 4G and better bandwidths, gaming would get a boost. Apps can offer services like video ads and more money can flow from that channel. With bandwidths getting better, branded integration was set to rise, opined an optimistic Chilakalapudi.

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