xboxpadmacro_large_verge_medium_landscapeWhile India is battling falling GDP growth rates and a high account deficit, the story for the video games industry is contrasting. The FICCI-KPMG Indian Media and Entertainment Industry Report 2013 published a record 16% growth over the previous year, to Rs.1500 crore (Rs. 15 billion / $277 million). Sweet numbers.

The report also states that the games industry in India will grow at a 22% CAGR to cross Rs. 4000 crore ($776m) by 2017. That means the video games industry in India will almost triple itself in 5 years.

How good these numbers might sound, they’re still behind estimates and forecasts. The console gaming segment, predicted to grow 28% only grew 8%. KPMG reports state ‘overall sluggishness in the economy impacting both unit sales and attach ratios’ as the main reason for this. While the console segment holds the largest chunk in the overall numbers, its prominence is expected to decrease as mobile gaming gains momentum.

The console segment will overall grow at a rate of 19% CAGR, to reach Rs. 1900 crore ($351m) by 2017. The report is yet to take in other future factors such as the possible success/failure of PS4 and the upcoming Xbox.

MOBILE GAMING – THE FUTURE

On the other hand, the Internet & Mobile Association of India estimates that 50% of India’s mobile users have access to gaming content on their devices. These numbers are expected to rise amid increased penetration of smartphones and tablets.

Mobile gaming revenues in India typically have come through telecom operator partnerships, but this is expected to change by 2014, the report states, when sources such as app-stores and online marketplaces will dominate mobile revenues. This despite the fact that operators are now offering up to 70% revenue share to game publishers.

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As expected, the big challenge for game publishers is monetisation, as a chunk of mobile game revenue in India comes from ad-funded free-to-play games. This also might be due to the fact of limited high-speed connectivity of smartphones and tablets alike, and limited access to credit cards. On a positive note, the report predicts this trend to change soon, with users slowly opening to newer revenue models.

MEEK OUTLOOK FOR PC GAMING

Surprisingly, PC gaming’s contribution to the numbers is minor. While it grew nominally over the past year and is expected to grow over the coming years, tangibly its numbers compared to console and mobile gaming are low. We suspect this might be owed to piracy, which is still big in the country. Also, we doubt that the report considers sales from PC clients such as Steam. Steam is yet to be officially launched in India.

The valuations and predictions on the Indian games industry in this report are based on ‘industry discussions conducted by KPMG in India’, due to the lack of any central control apex body to track and record digital and retail sales of gaming products in India.

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When not being the Editor-in-Chief at iLLGaming or a tech journalist that he is known for, Sahil indulges himself with his pug named Tony. His favorite games are Dota 2, Dark Souls, Deus Ex and DOOM. He is sucker for PC builds and dreams about benchmark numbers in his sleep.

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