Last October, Alok Kejriwal, the then CEO of Contests2Win, entered one of India’s fastest-growing entertainment sectors with an online- gaming portal called Games2Win.
The website had a list of games that were aggregated from other online-gaming sites, as well as those created in- house. One of the most popular among these, at least for some time, was a home-bred game called Kiss-mat. In this game, one gets to play with a cartoon of the Indi-pop singer Mika. The objective of the game was to kiss a cartoon of TV starlet Rakhi Sawant for as long as possible without being seen by the paparazzi. At its height, the game was played over 10,000 times a day, and it brought home the reason why Kejriwal began the site.
“We figured out that a lot of people were going to international gaming sites,” Kejriwal says. “We thought, why not start an Indian site with local content?” His site now has as many as 15,000 visitors a day, who spend an average of 20 minutes playing games ranging from cricket to pool. The games are free of cost and the website’s main source of revenues is advertising.
The next step, he says, is to introduce a massive multi- player online role-playing game (MMORPG), in which hundreds of thousands of players interact (mostly fight) in an online environment. The most popular MMORPG is called World of Warcraft, which, at its busiest stage, had one-thousandth of the planet’s population playing simultaneously.
Online gaming has barely begun to become popular in India; mobile gaming is the largest market for games here. But according to a PricewaterhouseCoopers report, the segment is expected to grow to Rs260 crore by 2010, registering a compound annual growth rate of 82.7% until 2010. Some industry observers, however, think this is a conservative estimate. For instance, the Reliance Anil Dhirubhai Ambani Group (ADAG), which supports the casual gaming portal, Zapak.com, alone is likely to invest Rs4,500 crore in its website in the next four years.
“We believe that the market is worth much more because the numbers don’t take into consideration serious players like us,” says Rohit Sharma, chief operating officer of Zapak Digital Entertainment Ltd. “We believe that by 2010, it’ll be a $1 billion market.”
Sharma says that global online gaming has seen a spurt in growth, and that India, with its broadband connectivity expected to grow significantly in the near future, could be the right place for online gaming companies. “It is poised to grow big time. If you look at the expected broadband connectivity in the next three-four years, it will be one of the stickiest entertainment options.”
He says that his company’s aim is to become the world’s best casual games portal by July. At present, it has a million registered users, with 10,000 new registrations every day.
Zapak and Games2Win are two of India’s largest online gaming portals, and are now attempting to settle in for a long innings in the casual gaming market. However, another portal, Indiagames, feels it is time to move on after witnessing complications in the medium.
Indiagames began operations in 1999 after its founder and chief executive officer, Vishal Gondal, decided to take his passion for gaming further. “Indiagames started India’s first online gaming site, where our model was advertising-funded,” Gondal says. “We had free games, but we soon realized that the business model had a number of issues. For instance, we were always relying on eyeballs and page views. So then, we moved from online gaming to mobile gaming. Today, we’re among the top ten gaming businesses in the world,” he says, adding he had never thought the business would grow so big. Today, Indiagames employs more than 300 people. “I had never imagined this. At that time, I thought it was just another fun activity I was doing,” he says.
Indiagames may have grown phenomenally in the past seven years, but now the industry is throwing some challenges. Industry players point out that high costs and rampant piracy are denting growth prospects. “One of the problems with the PC gaming segment is the cost of the game itself,” says Gondal. “They cost you Rs1,500-1,800. Then there’s piracy; 95% of games in India are pirated.” So, they are looking at newer options now. Indiagames, for instance, deployed a service called GoD—Games on Demand—in 2006.
This model provided monthly subscribers a wide variety of games available at a fraction of the cost. “We looked at the cable TV industry where subscribers were paying Rs100 and getting whatever they wanted. We decided to hitch our bandwagon to the cable business,” says Gondal. The company collected a catalogue of games across all categories from major game developers and went to the consumers with a proposition—a portfolio of 150 major games for Rs200 a month, and they could play any game they liked. “For us, luckily, this has been a very successful strategy,” says Gondal.
Industry players feel the dependence on advertising will reduce somewhat in the following months, when all three companies introduce a series of MMORPGs, which are usually paid services. But even then, they’re banking on what they’re good at because the infrastructure that serious social gaming requires—mainly broadband—isn’t available. “To some extent, it depends on net cafes,” says Kejriwal. “If they can get connected and demonstrate to users the fun of having broadband, people will want to replicate it at home.
To be honest, I don’t know where broadband will be a year from now,” he says.
Kejriwal has some reason to worry. The Cable and Satellite Broadcasting Association of Asia noted how India lagged behind other countries in broadband connectivity. The country currently has fewer than three million broadband subscribers, and the industry’s growth is slow. Estimates show that less than 7% of all households in the country will have broadband connectivity by 2015, compared with nearly 40% in China. That certainly is not a positive sign