Entering the Indian Gaming Industry

A.  Introduction

Games have played an important role in the history and mythology of India. The history & time of India has been divided into 4 eras called “yug” which will occur before it destroys itself (Pralay). Since the very first “yug” there are numerous examples of game being involved as part of life. The first era when Lord Shiva & Goddess Parvati playing the game of Pachisi, another era in which Pandavas playing a game of dice which resulted in one of the biggest war of Indian history “Mahabharata”. When Mughals arrived India, they bought Chess which is one of the most common board game still popular in Indian household.

The most common indoor game Indians play while growing up are Monopoly, Card games, Ludo, Carom, Snakes & Ladders. When it comes to outdoor games Cricket, Hide & seek, Gilli Danda, Kho Kho, etc.

Traditionally, Indians are card game lovers, and games like Rummy, kotpees, Teen Patti, are household favorites. Especially during festival seasons or holidays when the whole family get-together they play card games. This explains the obsessions with card games and its popularity.

While gaming has always been a major part of India, India skipped the computer & console game era and jumped directly to Mobile gaming. This is due to the fact that the economy was poor at that time and only the richest could afford a computer. However, now the economy is growing exponentially and the price of smartphones are as low as $100. Another factor for less popularity of digital gaming in the past was the low social acceptance which is now changing due to economic growth resulted in embracing entertainment and digital content, driven by growing penetration of Internet and smartphones.

B.  SWOT analysis of Online Indian game market

Strength

·     Increasing presence of local game publishers & developers.

·     Rank 18 on world gaming revenue rank with $581.6 Million in 2017. By 2020 it is expected to reach $711 Million.

·     0.55% market share on global gaming industry.

·     Around 1.6 Billion game downloads in 2016, and by 2020 it is expected to reach 5.3 Billion.

·     Increase in number of female gamers especially mobile games.

·     Rise in freemium games.

·     Acceptance of various monetization models such as in-app ads, soft monetization, in-app branding, etc.

·     App store growth is largely driven by mobile games.

·     Outsourcing hub, with various companies such as unbisoft, zynga, etc. already set up their base in India.

·     Changing gaming preference, strategy games are the fastest growing game type in India with market share of 16.30%.

·     As low as $0.15 is allowed to pay for in-app purchases regulated by google play & app store.

·     Increasing influence of VR & AR.

Weakness

·     Nearly 1 billion Indians are still not using smartphones.

·     More than 66% of total Indian population still have no access to internet.

·     Un-availability of high quality localized gaming content.

·     Lack of infrastructure, Indian market is still dominated by 1GB RAM & 8GB memory.

·     Lack of funding.

·     Lack of cultural acceptance by foreign gaming companies.

·     Not enough successful examples to understand the market.

 Opportunity

·     Digitalisation (Mobile wallets & e-commerce).

·     World’s fastest growing economy by an average rate of 7.6% resulting in rise in disposable income.

·     60% of population are between 17 to 35.

·     Increasing smartphone penetration.

·     Low cost & good quality smartphone options.

·     Average time spent on mobile increased.

·     Better internet connectivity coupled with improving telecom infrastructure, Q4 2016 a total game changer quarter.

·     Collapse of the price of internet data up-to 95%

·     Increasing per capita expenditure

·     Adaptation of Platform as a service (PaaS)

·     Government’s inclination towards enhancing game industry.

 Threats

·     Piracy, this has always been a major concern for various industries including gaming.

·     High cost of installation & maintenance.

·     Lack/limited opportunities to learn about game development.

·     Lack of regulations & government policies for welfare of gaming industry.

·     Low propensity to pay, the concept of “pay to win” is still unfamiliar hence the lowest ARPU ($0.8) among BRICS.

C.  Factors driving online gaming growth 

In less than 10 years, Indian gaming market growth crossed $540 Million. The growth is due to various factors such as changing players landscapes along with propensity towards advanced gaming technology. Growing internet penetration & connectivity, smartphones, social media penetration which covers the most dominating marketing concept in India, “word of mouth”.

The internet industry will grow at a CAGR of 9.45% and, by 2020 it will touch 426Million. On the other hand, number of smartphone users will be 400+ Million by 2020.

 

1.    Role of Government

Various government initiatives boosting growth in the country’s gaming industry include IPC, Indecent Representation of Women (Prohibition) Act, Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, FDI Policy, etc.

Government of India is focussing on digitalization more and more and hence there is a driving force to use internet & smartphones. In 2016, demonetization let to an increase in the use of digital wallets and e-commerce platforms.

 2.    Developers & Publishers

Gamezone, gameguru, expresscomputeronline, nexusnettech, Nazara, octro, etc., publishers have a high impact on gaming industry in India.

Jetysnthesys' PlayIzzon is among the industry leaders for developing & publishing Celebrity and persona based games.

Reliance Games is creating a platform, which would allow Indian developers to obtain international exposure to work with international publishers.

 3.    India an outsourcing hub

Renting out is one of the oldest & most popular model in India. Back in 1990s during holidays especially teenagers would rent out game console from local vendors. Also, following to the current trend of rental services such as taxi, Airbnb, households, etc., game rental services will grow as well in India. Additionally, various services such as technical support service, contact centre service, marketing automation service, etc., are also being outsourced to India for many years.

 4.    Suppliers

Biggest online distributors of online games are Steam, Desura, and IndieCity. Now Steam offers Cash on Delivery on the purchase of PC games. Cash on Delivery is one of the most preferred modes of payment in India as credit card penetration is less than 5%. Cash on Delivery is one of the reason of e-commerce giant flipkart’s success.

In addition, console games are sold through Large Format Retailers (LFRs) in India. These LFRs include stores such as Croma, Reliance and Landmark. Gamers can also order their tech online through Amazon and Flipkart. Gaming companies such as EA also have dedicated distributors in the country to provide games to customers.

Other online sites are gamexs, infibeam, gameloot, gamestheshop, etc.

 

D.  Classification of games in India

1.    On basis of technology,

·     Mobile Gaming- Dominates the online game market and contributes 50% market revenue. By 2020, the market share would be 50%.

·     Console Gaming- The installation & maintenance cost is comparatively higher which resulted in the slow growth of Console Gaming. However, by 2020 36% market share would be from Console Gaming & economic growth is one big factor.

Computer/laptop gaming- A rise in computer gaming would be there as well majorly dominated by Gen Z & the millennials. Recently HP expanded their gaming laptop series Omen hence capturing 25% market share. 

2.    On the basis of game type

 ·     Strategy- Fastest growing game type in India with 16.30% market share. Highest rate of retention is observed in India for Strategy games.

·     Casual- The fact that majority of Indian population is in its youth and part of their daily life is spent commuting via local commute. Casual games require low internet speed and less memory space is the best choice to kill time while commuting. It accounts for 14.82% market share.

·     Action- accounted for a share of 13.73% in India gaming market in 2016 & is expected to grow to $111 Million by 2022.

·     Sports- 5.82% market share, popularity is still low. However, by 2022 the market share would be 8.62% and increasing game awareness is one big reason for this growth

·     Simulation- 5.33% market share due to less popularity. Dominated by female players, the segment is expected to grow with the increase in number of female players.

·     Others which include adventure, arcade, board, card, casino, educational, puzzle, etc., and accounted for 40.30% share in India gaming market in 2016.         

 E.  Publishing a game in India-

1.   Before launch

·     Gameplay-

                       I.        India is a country which is still adapting to gaming concept, we must consider the importance of tutorials and tips.

                      II.        Ensure the first few sessions are much easier to play and should make the player think the game is difficult but they are playing very well.

                    III.        This phase should follow a story-board and plenty of tips and tutorials.

                    IV.        Also, in the early stage make sure there are ways to skip levels. If Indian players are stuck at one level for too long, they will uninstall the game.

·     Infrastructure consideration-

                       I.        For mobile game consider keeping lower initial size of the game.

                      II.        One-handed vertical game play especially if the target audience is youth as they play more while they commute with local transportation.

                    III.        However, if the target audience is 30+, horizontal gameplay is favorable.

·     Game features-

                       I.        Try to keep the focus on product metric & how the game should be played rather than how to monetize.

                      II.        Primitive in-app purchase or play-to-win models are not preferred by Indian players as the concept is still very new in Indian players’ mind.

                    III.         Having better features and gameplay would serve as a UPS of the game which can be used for marketing & sales. Also, this will result in high retention.

·     Payment gateway-

                       I.        Make sure to add various Indian payment modes in the early stage for enhanced.

                      II.        While credit card penetration is less than 5%, recently due to demonetization various payment wallets such as Paytm, Freecharge, Google Tez, became popular. Mobile operator billing is another option which is simple to use.

                    III.        On the other hand, using debit card is common however complicated.

·     Localization-

                       I.        It is expected that by 2025 over 70% of the online content will be vernacular. The smartphone & internet penetration is increasing in India majorly due to government policies and an interest to keep up with the global trend. This will increase the use of smartphones in remote areas and within non-English speakers.

                      II.        Localized content blended with gameplay, local IPs, characters & attributes is more preferred by Indian games, the biggest example is TeenPatti by Octro & Chota Bheem.

                    III.        Local theme will be more relatable for Indian players hence reducing the tutorial time.

2.    During launch

·     Set your target audience first-

                       I.        Depending on the game type & game play, users will vary. For example strategy gamers are mostly in Tier 1 cities like Mumbai, Bangalore, Delhi, Pune, Chennai, & Hyderabad.

                      II.        Various class such as Upper class, Middle class (upper-middle class & lower-middle class) & lower class have different preferences, habits and needs. For what is middle class in US, Canada, Germany, etc., is a upper class in India.

                    III.        Majority of Indian population now lies in Middle class.

                    IV.        An upper middle class is a sector of India population who are neither very rich but definitely not poor. Their salary range from 2,500 RMB to 20K RMB and are mostly working in professional areas (IT, Banking, Medical, Finance). The level of education is also higher among them.

                     V.        There are 4 big religion in India. 80% are Hindu, 14% are Muslim, 2.3% are Christians, 17.% are Sikh & rest belong to other minority religions.

                    VI.        Only 7.6 Million of the total tax paying Indians were considered as middle class or upper class, i.e. earning more than 5000RMB.

                  VII.        Purchasing power parity in India 1.5RMB, i.e. what one can buy in $1 in US, same could be bought in 1.5RMB in India.

·     KOLs branding-

                       I.        Social media like Facebook, Twitter, Instagram, etc., are now part of Indian internet users. Switching from the traditional TV branding social media KOL & celebrity endorsement is much more effective and cost-efficient in India.

                      II.        KOL management companies such as OML, culture machine, the viral fever, etc., bridge the gap between companies and KOLs.

                    III.        Online web series and short entertainment videos are also popular in India and have huge followers. Few of such youtube channels are AIB, Filtr Copy, Being Indian, BuzzFeed India, etc.

·     Game streamers & game communities-

                       I.        As the game industry is rising, game streaming is getting popular in India as well. Few game streamers are Carryminati, Technical Guys, Tech MM, etc.

                      II.        Apart from Facebook & youtube communities, other communities dedicated to gaming are getting popular as well. Such as indianvideogamer.com, Steam, Twitch, gamingcentral.com, etc.

                    III.        Promoting the game and creating a hype from these channels would be cost effective and efficient as majority of users in these platforms are early adopters, they are the people who put the word out.

·     Offline events for game launch-

                       I.        Now various game & mobile conferences are being organized in India. Recently Ministry of Electronics & information technology, Government of India in collaboration with confederation of Indian Industry organized Indian gaming show. Nasscom, an Indian gaming forum is taking initiative to build a stronger gaming community. Also, last year Indian mobile congress was held. Being part of local conferences is an effective way of game promotion.

                      II.        Promotion with google play gift cards & amazon gift cards that users buy from stores which they can further redeem. Branding on the gift card is another way to get attention. Having good relationship with these stores can get this branding for almost no cost.

3.    After the launch

·     Distribution-

I.              Google play & app store are the two biggest platforms for mobile game downloads in India. Google play has 90% market share. With 700+ games being submitted per day these 2 app store are crowded.

II.             Some alternate stores and methods popular among Indians for game sharing are file transfer tool such as SHAREit app, microsoft store, softonic, amazon, gamestheshop, gamexes, gameloot, steam, 9Apps, Indus app bazaar, etc. 

III.           Game cafes & gameplexes which were not so common before are now getting popular. Recently, in Chennai, India’s biggest gaming center opened up, Arknemesis gaming. Around the country, game cafes are becoming a popular hangout place. It’s a good idea to do branding & distribution of game here.

IV.           CPI & CPM campaigns on facebook, instagram & online advertisers such as Unity 3d, Mobivista, leadbolt should be in distribution strategy. India is one of the cheapest CPI market with an average of $0.70.

V.            SDK or pre-installs on phones, in 2017 there are around 300 Million smartphone users in India & by 2018 there will be 382 smartphone users. Clearly, the market size is huge and SKD integration would be a good idea after several months of game launch.

VI.           Running ad campaigns on popular apps in India. Some of the everyday use apps in India are ola cab, uber, zomato, foodpanda, Inshorts, Dailyhunt, NewsDog, amazon, flipkart, hotstrar, netflix, Paytm, freecharge, SHAREit, Truecaller, B612, etc.

·     Monetization-

                       I.        The concept of “pay to win” & in-app purchases are still very new to Indians and that explains why the ARPU in India is lowest among BRIC ($0.8). So this method of monetization doesn’t work well in India right now. Indians are not used to paying for digital content. However, there is a sign of change in this trend with growing economy and shift in mindset.

                      II.        Over 90% of people playing Clash of Clans prefer to just wait and slowly grow and level up their defense and weapons as per game play rather than for it.

                    III.        Indian players are happy to watch a 2 minute long video for extra gold coins. As long as the ad is non-intrusive, there is a tolerance for in-app ads.

·     Others-

                       I.        Make sure to not have frequent updates. The data cost is low now & speed is better as well but Indians are still in the process of transitioning from the old phase. Having frequent updates bothers the Indian players game.

                      II.        After several months of successful game launch, sponsoring some events would be a great idea for in-direct branding. In Indian universities, each year 2-3 events are being organized in an inter-university level. Other sorts of sponsoring could be music festivals, comedy shows, local events, etc.

 B.   Conclusion

The time is now. The gaming market in India is now a sizable market with growing ecosystem and infrastructure. Being conscious about the Indian players, cultural factors, player’s limitations in terms of hardware, software, spending power, etc., the developers need to create a customized gaming experience which will serve their specific preferences.

What are some of your observations related to Indian gaming market?