Mumbai: The apex body of IT software and services Nasscom on Wednesday lowered its forecast for the animation and gaming industry for 2012 on account of the global economic downturn.
Nasscom revised the forecast for the gaming industry from $1,060 million to $830 million and animation industry from $1,163 million to $1,000 million.
“Indian animation industry is expected to grow at a CAGR of 22% to reach $1 billion while gaming industry to grow at a CAGR of 49% to reach $830 million by 2012,” Nasscom president Som Mittal told reporters here while releasing ‘The Animation and Gaming Report 2008-09´.
The report, prepared by Nasscom and Ernst and Young provides a detailed insight on the growth-drivers, business models, issues and challenges for the gaming and animation industry in the next few years.
The other factors which resulted in revising the forecast were a lack of availability of skills for animation industry, slow growth of domestic box-office for animation movies and proof of concept or IP creation not upto expectations.
“Nasscom recognizes animation and gaming industry as a significant user of technology. However, being in nascent stage, it is critical for all stakeholders to come together and create an environment that nurtures this industry for it to be able to compete at a global scale,” Mittal said.
“India’s pursuit to establish itself in the global animation and gaming arena is facilitated by quality and lower cost advantage, large scale availability of manpower along with cultural and English language synergies,” Ernst and Young Partner and National Leader (Media and Entertainment Practice), Farokh Balsara, said.
This combined with growing consumer demand from the domestic market would provide the required boost for the industry in the country, he said.
Balasara said that the key issues faced by the Indian animation industry are a lack of trained manpower, excessive dependence on off-shoring, limited domestic proliferation and lack of original content.
The report classifies gaming industry into four segments- online, mobile, personal computer and console games.
The domestic gaming market is driven by console and mobile gaming consumer industry, Balasara said.
“Availability of console hardware at lower price points and high installed base of mobile phones are the major growth drivers for console gaming and mobile gaming market,” he said.
The key issues faced by the gaming industry are high import duty causing hardware price inflation, major share of revenue for mobile operator than game developers, resulting in quality compromise and piracy, among others, he said.
The report outlines some of the key steps that need to be taken for the industry to realize its true potential.
“Thrust on education and employability, conducive policy and simplified duty structure, IP creation and protection and global branding initiatives can help to further build India as an animation and gaming hub,” the report said.