Online gaming companies build, invest; await demand boom

Monday, 26 May 2008, 21:12 IST
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Mumbai: Online gamers are all out there leaving no stones unturned to grow India's nascent online games market. They are now in the process of collecting content and building distribution channels, as they wait for higher broadband penetration for sizeable returns, say company officials. India had 5 million online gamers in April, while Asia-Pacific saw 79.6 million online gamers, excluding those on public computers and mobile phones, according to comScore, an internet information provider. "It is quite a meager number to say anything between $5 million and $10 million, but the potential for growth is there," Rohit Sharma, COO of Zapak Digital Entertainment, part of the Anil Dhirubhai Ambani Group said. As there is a shortage of official data, growth estimates may vary. Zapak says India's online gaming will grow to $1 billion by 2013, while Indiagames sees it at $250 million by 2011. Research firm IDC India puts online gamers at 14.9 million in 2011. Zapak is investing about $100 million in the next 3-5 years. Indiagames, in which UTV Software Communications holds a controlling stake, may spend $15 - $20 million over three years, Vishal Gondal, founder and director, said. Strategically, online gaming firms have already started tying up with cybercafes for distribution of games with fast speeds, while keeping rates as low as 40 rupees an hour. But India's lack of internet penetration and poor broadband growth that prevented online gaming from taking off in a big way remain challenges to these firms. There are 46 million internet users in India, 60 percent of these are under 35 years of age so the penetration should be higher than just 8 million gamers, Balendu Shrivastava, group business director of research agency, IMRB International, said. "India has huge scope for this to develop as a pass-time, but it's still a few years away," he added. Content acquisition makes up more than half of the companies' total costs, varying from a few thousands to millions of dollars, but games firms are willing to put in the money awaiting the demand explosion. The rewards are undoubted, say industry players.
Source: IANS
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