Online gaming is a real industry, with real money

A senior analyst with In-Stat/MDR, Eric Mantion, once said that online gaming is a real industry, which will make real money. He also claimed that there are a lot of companies working very hard to make this industry grow quickly, which will help to move things along faster than many of us expect.

A report published by IMRB International on behalf of the Internet and Mobile Association of India, (IAMAI), values the online gaming industry in India at Rs 210 million, with most of the revenues in this segment, currently, coming from organised cyber cafés (Rs 121.7 million), subscription based revenues (Rs 66 million) and advertising revenue (Rs 22.4 million).

The gaming market in India is expected to grow to $ 424 million by 2010, according to the 2007 NASSCOM Report. This growth is expected to fructify by enabling factors like increasing internet penetration, and entry of industry houses into online gaming business. Today, entertainment features as one of the predominant spending areas amongst the Indian consumers.

Currently, most of the online gaming portals are on a free-to-play model and are looking at advertising revenues to sustain the first phase of growth. Brands, which have already begun to realise the power of in-game placement and advergaming, are now associating with online games, in one way or the other. Almost 20% of the revenue from gaming (Rs 40 million) currently accrues directly to international players not based in India.

Internet usage has seen an upward swing in the last few years. I see online games as soon becoming an avenue to satisfy the craving of Indian users. Casual games, which constitute a major chunk of the pie, can be positioned as another arena for entertainment to appeal to women and older men.

The three factors which will fuel the growth of internet in India are content, access and pricing. Gamers, today, do not fret too much over whether the games are of Indian or foreign origin. They want an engaging gameplay, which, along with the two other factors will decide if s/he will play the game again or simply shift his loyalties to another game.

Well, the number of PC literates and has also been on the rise in India. A recent study by - IDC and Forrester – states that one out of every 50 Indians has access to a PC. There were 27 million units installed in the country by the end of November 2007.

Moreover, pricing is the most critical factor for the Indian gaming industry as India is a price sensitive market. If the companies are able to play well on the pricing factor, it would take the game further in the Indian gaming industry.