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EA scouting for outsourcing firms in India

EA scouting for outsourcing firms in India

Hyderabad: The world’s largest game developer, Electronic Arts Inc. (EA), is scouting for Indian partners to outsource game development and reduce costs.

Head of Los Angeles-based EA’s worldwide outsourcing operations, Mark Van Ryswyk, said his “company held a series of discussions with Indian game developers specializing in PC and console games to find a suitable partner with right skills."

Van Ryswyk was in India to attend industry event Nasscom Animation and Gaming India 2008, held here last week. Nasscom (National Association of Software and Services Companies) is a lobby group.

“So far, we haven’t identified any development studio that fits our requirements," Van Ryswyk said. EA was open to “investing in the right partner to expand their skills portfolio" to match its development requirements, he said.

Despite strong revenue growth of 40% to $894 million in the quarter to September, from $640 million in the year-ago quarter, EA reported net loss of $310 million, compared with $195 million last year.

After its second quarter results in October, EA announced a cost cutting plan that includes eliminating some 6% of the company’s workforce, which was 9,000 on 31 March. The plan is expected to save the company $50 million.

“As part of this cost reduction initiative, we expect to reduce hiring and continue to expand in lower cost locations," EA’s chief financial officer Eric Brown told analysts in the US earlier this month, after announcement of the company’s second quarter results.

Currently, EA has a mobile game development studio in Hyderabad with a headcount of 250. It is also establishing an art-team in the city to work on its global PC and console projects that are currently underway.

The company has seen at least 150% growth in sales of its PC and console games in India in the last two years, EA’s country manager Ajay Khanna said, without elaborating. Growing PC penetration and increasing interest in gaming consoles is driving the growth, he said.

Nasscom estimates India’s gaming market is worth $212 million. It says the global gaming market will touch $36 billion by 2009.

Jayant Sharma, chief executive of Milestone Interactive Software Ltd, the only Indian distributor of Sony Corp.’s gaming consoles, said he expected sales of the PlayStation-branded consoles to double in the current fiscal year to March 2009. Besides Sony, Microsoft Corp.’s Xbox and Nintendo Co. Ltd’s Wii are also sold in the country.

India’s gaming development industry is expected to touch $300 million by 2009 and $1 billion by 2012, and is creating a rich talent pool, which leading global players can tap into as part of their efforts to improve competitiveness, said Biren Ghose, chairman of Nasscom’s animation and gaming forum. Work currently outsourced to India is mostly lower-end production and testing jobs.

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