The Hindu : Other States / Maharashtra News : Survey indicates big money in gaming, animation

Online edition of India's National Newspaper
Monday, Apr 18, 2005

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Other States - Maharashtra

Survey indicates big money in gaming, animation

MUMBAI: Gaming content and animation could emerge as major economic generators in the enteratainment sector in the next few years, according to a study.

``With India witnessing an explosive growth in mobile phone users' base, analysts say generation of gaming content for domestic as well as overseas clients may well become the next big thing after IT outsourcing,'' a FICCI-PriceWaterCoopers report on `The Indian Entertainment Industry -- an Unfolding Opportunity' has observed.

The report notes that in 2004, animation industry rose to its highest level. The emergence of the gaming industry also made its mark during the year with the first ever investment in this segment by a Chinese company, Indiangames Ltd.

Increased use

The year was also marked by increased use of animation in the film segment as was evident by the Hindi blockbuster `Hum Tum'. Effective use of animation in special effects and titling in the film continued as before. The escalating download of games on mobile phones is likely to open new opportunities for the existing gaming companies and would also encourage entry of new companies in this sector.

The report observes ``India's low-cost talent pool continues to be a key growth driver for the animation industry today. Also, substantial intellectual property work is outsourced to India vis-a- vis other low-cost Asian countries, due to better command over English. This has given an added strength over the other Asian/ Pacific countries, as Indians are better placed to appreciate Western humour specially animating a gag''.

Major advantages

Pointing out that its good base of talent and intellectual property in the sector were advantages, the report said ``with technical expertise, highly skilled manpower and international collaboration, the industry is going from strength to strength''.

The report has been prepared on the basis of information obtained from key industry players, trade associations, government agencies, trade publication and other industry sources.

The report noted that the cost of production of a half hour animated programme in the US was around 250,000 to 400,000 US dollars. In Korea and Taiwan, it was around 110,000 to 120,000 dollars while in India it would cost approximately 60,000 dollars. When the low cost of labour and infrastructure offered by India was coupled with the fact that computer-based animation offered film-makers 30 to 40 per cent cost reduction over traditional films, the overall saving would act as an incentive to the industry.

High investments

The report stated that decreasing margins and increasing public demand for entertainment content has product houses looking for maximum cost benefits. ``The increased pressure on revenues has left only one way open for such companies - outsourcing,'' claimed the report.

Recalling that the Indian companies had compromised on quality after having accepted the work a decade ago, the report noted that high investments were needed for the animation sector.

``Animation is far more expensive to produce than live action films, making it less attractive for producers to use this media,'' it added.

On the future outlook of the gaming industry, the report said the growth path for the animation industry was to move up the value chain.

The gaming industry in the country was in the nascent stage, the report said and added that its size was estimated at 50 million dollars. --UNI

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Survey indicates big money in gaming, animation