Indian games industry records 16% growth in 2012 - report

Sameer Desai
Indian games industry records 16% growth in 2012 - report

The Indian games industry grew to Rs 15 billion ($277m) in 2012, recording a growth of 16% over the previous year, the FICCI-KPMG Indian Media and Entertainment Industry Report 2013 has stated.

The report also estimates that the games industry in India will grow at a 22% CAGR to reach Rs 42 billion ($776m) by 2017.

While console gaming continues to be the largest segment in India, its growth over the last year was 8% as opposed to the estimated 28%. KPMG puts it down to ‘overall sluggishness in the economy impacting both unit sales and attach ratios’.

While the report’s five-year estimates predict that console gaming will continue to be the leading segment, it expects a lower growth year after year as mobile gaming gains prominence in the country.

One reason for the lower predictions for console gaming going forward is the impending discontinuation of the PS2, the only entry-level console in the market. KPMG predicts that the PS3, Xbox 360 and PSP/Vita will only partially offset those lost PS2 sales.

The report estimates that the console segment will grow at 19% CAGR to Rs 19 billion (351m) by 2017, but hinges those expectations on the commercial performance of the PS4 and how quickly mobile devices are able to close the gap to consoles.

The Internet & Mobile Association of India estimates that 50% of mobile users in the country access gaming content, and the report predicts sustained growth in the mobile gaming segment aided by increased smartphone and tablet penetration.

While mobile gaming revenues in India have mostly come through telecom operator partnerships, the report expects off-deck sources like app stores to dominate mobile revenues by 2014. This despite the fact that operators are now offering up to 70% revenue share to game publishers.

The big hurdle remains monetisation, as a majority of mobile game revenues in India come through ad-funded games. However, the report expects that to change with increased smartphone penetration giving gamers access to a variety of global content and newer revenue models.

According to the report, the PC gaming market grew nominally over the past year and expects the segment to be a minor contributor to growth over the coming years. We assume that digital revenues from services like Steam are not taken into consideration here.

It's worth mentioning that the valuations and predictions on the Indian games industry in this report are based on 'industry discussions conducted by KPMG in India'. There are currently no central bodies that track retail or digital sales for gaming products in India.

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Tags: mobile games , Development , industry , india , MCV India , console gaming

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