Games Indians play

The world of online gaming is changing— and how! Not so long ago it was restricted to only a few broad categories— action, sports, puzzles and adventure games. Today, that universe is rapidly expanding as the gaming industry in India gradually evolves. Says Alok Kejriwal, Cofounder & CEO, Games2Win.com: “Games in the romance and matrimony genres have now become extremely popular and are equally enjoyed by both Indian and foreign gamers. While gamers abroad in the US, Europe and Latin America are fascinated by Indian customs, local audiences can easily relate and connect with them.” Consequently, games like the The Great Indian Arranged Marriage, The Bridal Dress Up and Marital Combat now top the popularity charts.

Online gaming, though relatively a new phenomenon, is fast growing in popularity in India, particularly with people in the 17-35 age bracket. According to estimates by IMRB International, the number of online gamers in India has soared from 2.8 million in 2007 to 7.2 million by 2008. Says Sunil Rajshekhar, COO & President, Times Internet: “The popularity of online gaming is entirely dependent on the overall Internet usage. The 17-35 age-segment accounts for the major chunk of the Internet user base and is the target segment for the gaming industry as well.”

In India, while the origin of online gaming coincided with the arrival of the Internet, it was only in 2007 that the industry started to come of age. Its growing popularity caught the attention of venture capitalists, which made it easier for the industry to tie up funds for expanding operations. For instance, Games2win received a funding of $5 million from Clearstone Venture Partners and Silicon Valley Bank Financial Group. Another start-up, Kreeda Games, received funding from IDG Venture India and SoftBank China of about $10 million. Says Quentin Staes-Polet, CEO, Kreeda Games: “Most of the online gaming portals here are either funded by venture capital or backed by big corporate houses.”

Despite the exponential growth, majority of the Indian gaming portals— there are currently five key players in the industry—are not profitable yet. Most claim they have a viable business model and hope to break into the black soon. While each player has its own target audience and unique revenue model, broadly web portals have looked to monetise their online PC gaming businesses through four models: on-site advertising, advergaming (customised games for brands), revenues generated from offline activities at gaming cyber cafés and subscription models where users either purchase the product or make periodic payments to access games, usually of the MMORPG (massively multiplayer online role-playing game) genre.

Advergaming is gradually emerging as the preferred revenuegenerating conduit. Major players like Games2win have bulk of their revenues coming from advergaming. “In future, this model can be expected to gain more significance as advertisers look to maximise ROIs from their marketing investments,” says Rajshekhar.

Games2win is two years old and hopes to break even by the end of the next financial year by clocking revenues of around Rs 5 crore. The portal’s revenues have grown six times in a year from Rs 25 lakh in 2007-08 to Rs 1.5 crore in 2008-09. Some players like Zapak, which has over 90 per cent of its traffic from India, aim to take both the online and offline route. “Around 40 per cent of our revenues come from on-site advertising and advergaming followed by 30 per cent each from subscriptions and offline activities such as gaming tournaments and cafés,” says Rohit Sharma, COO, Zapak Digital Entertainment. The company was hoping to break even by the end of fiscal 2008-09.

One of the unique characteristics of gaming is that it reaches out to all demographic segments—from teens to working executives to even older people. Despite this, online gaming has been relatively slow to take off in India. The industry attributes this to the Indian cultural mindset. “There is a lot of negative perception about online gaming among parents. Unlike in western countries, gaming here is considered as a waste of time and something meant only for children. This has to change if we want to grow bigger,” says Rajshekhar, who believes the inevitable entry of international players will further transform the industry.