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Gaming
is a phenomenonal industry internationally, surpassing Hollywood and other
entertainment industries. Inspite of having all the necessary talent parts,
India has not been able to realise its potential in this industry which
is a $32 Billion industry globally.
While popular gaming website Gamasutra has 160 Indian gaming companies
listed with it, a majority of these are more into smalltime related services
like porting and testing etc. Amongst the few handful companies that are
majorly into gaming and have some critical mass is Milestone Interactive.
The company which is into development, services and gaming software and
hardware distribution has been amongst the early entratnts in this field.
As part of Gaming Gyaan series, Animation 'xpress' Anand Gurnani
recently met up with Milestone Interactive Business Development head
Sachin Naik and Business Director Sunil Menghrajani.
Here are Excerpts from an insightful conversation-
Lets begin
with some insight on Milestone?
Milestone began 8 years ago in 1997. We represent leading global games
publishers in India including Sony Computer Entertainment, Atari, Codemasters,
Eidos, and Novalogic. We are also a full-fledged developer of hardcore
& casual games for PC, console & wireless platforms. As the exclusive
distributors for Sony Computer Entertainment, Europe (SCEE) in India,
we market, distribute and sell PS2 game consoles, peripherals and software
across the country. Soon we will be launching the PSP (PlayStation portable),
which is a hand held gaming and digital media entertainment device from
SONY.
Right since
inception, Milestone has been making legitimate software available in
the Indian market. Not only have we imported the titles, but in most cases
have made sure that they are made available day and date alongside the
international launch. We have closed the gap between local and international
game release dates as well as brought price points down, bringing some
of the catalogue titles to India in the price range of Rs 199/- to Rs
499/-
Milestone
has also gone into the first phase of localization; we have locally produced
boxes, local manuals, and local docs. We are also doing stamping and replication
locally for some of the titles.
Prior to
our entering the field, the history of legitimate game distribution in
India would be roughly a decade old. Jayant Sharma the CEO of the company
is a pioneer in this field and he has played a large role in getting gaming
off the ground in India, he's got a background in Music, Entertainment
Hardware, IT and International trading. Actually even before starting
Milestone Interactive, we started with distribution of Edutainment Software.
What was
that?
It was a company called Eduteq. Launched 2 years before Milestone Interactive,
Eduteq distributed edutainment titles. The ground realities back then,
some of which haven't changed yet, were that people were not willing to
pay the hi end prices (1499/-), also the international syllabus was not
suitable for Indian students. Besides, the PC penetration was much lower
than what it currently is.
We were always
an entertainment company so we shifted from edutainment to gaming.
Coming
Back to Milestone, what's your business structure?
Our business is broadly divided into 4 areas, they are Game Development,
PC Games Distribution & Licensing, Playstation Game Consoles and Software,
and finally theatrical and home video distribution of Movies.
The focus
areas for our Game development business are Product creation & 3rd party
development for PC & Console, Artwork Outsourcing and Creation of
Mobile and Wireless Games. We will release a combat-racing game for the
PC platform in the fourth quarter of 05. This game has also been approved
for leading consoe platforms and will consequently be released for these
console platforms too.
As part of
our PC Games Distribution we reach out to over 1000 stores across the
country from various segments such as Music, Video & Home Entertainment,
Books, Toys, Cell Phone stores, Photography, Computers, Departmental,
Specialist stores etc. A large number of lateral accounts are serviced
by our regional & local distributors whereas Key National Accounts
such as Planet M, Music World, Lifestyle, Landmark and Sony World are
serviced directly by us.
As regards
Playstation Game Consoles and Software, I have already dwelled upon it
in the beginning of the interview. Here I would like to point out that
the Sony Playstation is the only gaming console that has official representation
in India, Nintendo and Xbox do not have any representation here. Even
in the grey market Playstation outsells the other consoles.
How many
companies are into gaming in India?
More than 160 Indian companies are listed as gaming companies with Gamasutra,
however it is unclear what they do within the games industry! There are
only a handful of Indian companies that are seriously into game development
& publishing on a substantial scale such as Milestone, Dhruva, Indiagames
and Paradox.
What is
the size of the local market?
There are a lot of impediments in getting the right figures. A guess estimate
and this is mine, is that PC and Console games market should be roughly
around Rs 60 -70 Crore annually. The pirated market would be an additional
Rs 50 crore in value terms. The PC Penetration in India is around 1.6
million homes (TOI 30 JULY : Source MRUC/Hansa research) Even amongst
these there is a small percent that is equipped with game video cards
etc.
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"PC
and Console games market should be roughly around Rs 60 -70 Crore
annually. The pirated market would be an additional Rs 50 crore
in value terms"
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If the
legitimate market is in the range of 60-70 crore, wouldn't the pirated
market be much more?
It depends on whether you are talking in value terms or volume terms.
The cost of a pirated CD is just Rs 50, which is on an average a tenth
of the price of an original title and sometimes a fifteenth of the legitimate
cost. While the ratio in terms of unit sales (Volumes) between pirated
and legitimate ones would be 1:15 in favor of pirated, the overall value
of pirated sales is nearly as much as that of legitimate fare.
What is
the size of the wireless games market in India?
It should be roughly around Rs 20 Crore and primarily mobile games. There
are around 50 million handsets in India, of which around 4to 5 million
handsets are Java enabled with color screens. 2% of the total handset
population has downloaded games. Wireless games tend to be license driven
and attract occasional gamers.
Titlewise,
what are the volumes like for PC & Console?
For PC, The bestsellers sell anything between 20 and 25,000 units over
a period of 2-5 Yrs (So far 10 -15 TITLES have fared like that in India)
Also the prices of titles lower after the initial strong periods of sale,
where a title priced at 1299 could be reduced to 499 after a few years.
Good Sellers are titles which do 3-4,000 units. And regular staple fare
sells around 1,000 -1,500 units.
For console
software, it would be too difficult to even hazard a guess. In terms of
the hardware (PS2) the installed base in India is around 100,000 units,
give or take a few.
LAN Gaming?
Lan gaming
is just about taking off, not more than 500/600 game rooms across the
country (Sify / Reliance etc). Considering each of these has around 15
PCs on an average then you have about 9000 pcs in LAN gaming.
From 97 to 2005. What has the experience been like?
PC Penetration has grown, the prices have fallen. So far video games
have had a limited impact on the market, however this is growing. There
are various reasons for this -
- Limited Exposure, Video gaming is not part of the core Indian culture
- Only recent generations (Mid 80's onwards) have any real exposure to
PC gaming
- Availability & Installed base of the platform is still relatively
low
- The price of software is also a barrier (This thanks the software being
imported and the amount of duties and levies, besides the volumes of legit
sales are pretty low hence higher costs. Console hardware and software
have high import duty + taxes (ranging between 25 to 50%). The heavy taxes
and duties coupled with the low volumes raise the prices as compared with
the pirated content which is available at Rs 50 - 150/- a title.
While the only positive aspect to piracy is the sampling opportunity &
exposure it gives to consumers, the menace of Piracy has too many adverse
side effects for the industry as a whole.
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"Piracy
has too many adverse side effects for the industry as a whole"
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Like?
Not only is piracy a loss of revenue for distributors, but it's a prohibiting
factor for new entrants too. Bigger international players stay away due
to this. In turn this means that market development activities will suffer.
Second
thing is because distributors/importers like us dont find the volumes
to be growing the localization quotient will be low.
Low localisation
means lack of a developed domestic market of gamers, which means you cannot
compete in the international arena. Until and unless we have a proper
dedicated and growing community of gamers, we will not be able to understand
the psyche, which means Indian companies end up doing bits and pieces
of service work.
The gaming
industry worldwide is $32 Billion and a substantial part of this business
can come to us. All the components are there in this country but the talent
has never considered gaming as a career, thanks to gaming not being in
our culture. Having a growing community of gamers is therefore essential
to growing the game development business in India.
Another thing we have observed is that since Gaming is not a mainstream
activity, simple games which are easy to play do well. Hardcore gamers
are more prone to pick up pirated stuff as they are technically savvy
and well informed of which games they can pick up locally. It is usually
more of the first time users that pick up legit games. Though there are
a few serious gamers too who pick up legitimate stuff.
What is the cost of developing a game internationally?
Depending on the platform a game the costs of making a game vary. Typical
ranges for a game being built from scratch are as follows
PC - US $
200,000 - US $ 5 million
Console - US$ 1 - 4 million
Wireless / Mobile Games - US$ 30,000 - US$ 200,000
Costs can
vary fairly significantly beyond this typical range based on the following
factors
1. Game Design / Genre / Target audience / Play duration etc.
2. Place of development
3. Experience & skill levels of team members
Are there
any companies involved in developing physics engines, engines or AI for
international game developers?
Typically
to develop an engine it takes around 5 man years and development time
of about a year. So in cases like India where things are still in infancy
stage it is best to license an engine as you get something stable and
cutting edge.
Internationally, there are several companies making everything from all-in-one
game engines to specific technology components such rendering engines,
physics engines & even AI middleware. A few examples are as follows
GAME ENGINES
Source from
Valve (Half Life 2)
Doom 3 Engine (Id Software)
Quake 3 Engine (Id Software)
NetEmbryo from NDL
Jupiter Engine (Monolith/Warner)
MIDDLEWARE
Renderware
Graphics from Criterion
Renderware Physics from Criterion
Havok from Havok (Used in Half Life 2)
Novodex
Intrinsic Alchemy (Vicarious Visions/Activision)
Renderware
is now owned by EA (was acquired for US$ 47 million recently).
The buzz
that one hears around games is that they are getting more complex and
realistic. Does that also involve the physics and math engines in terms
of simulations. Please comment?
Academic
math and dynamics are very different from the realtime simulated math
and dynamics applied for games. From a gaming point of view, it becomes
difficult to simulate theoretical physics unless the hardware can keep
pace.
Gaming is
going towards reality, but it is alternative reality just like in Cinema
and TV - Reflections of a culture rather than observed behavior. There
is a certain level of dramatization to make it interesting. With nex gen
hardware it is increasingly becoming possible to do real world simulation,
but the point is 'Would it be interesting'? The reality thrust is on the
CG side and not necessarily on the physics side. It is about finding the
right balance between realism and fantasy.
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"It
is increasingly becoming possible to do real world simulation, but
the point is 'Would it be interesting'? "
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Crystalgazing
into the future, what do you foresee?
The day
an Indian game does well abroad it will kick off the Industry. Somebody
will get that right and people will follow. Even for us, we distribute
the games and we know the potential. We are passionate about games and
their quality as well. The gameplay experience is most crucial - Does
it bring anything new? Either improving on an existing game or a completely
new concept.
There are
some positive trends that we foresee - enlisted below
* Number
of PC owning households has more than doubled from 7 lakh homes in 2001
to 16 lakh homes in 2005 (Source MRUC/Hansa research : TOI 30.07.05)
* Increasing penetration of Java enabled / gaming capable cell phones;
current installed base is 50 million handsets
* Greater awareness for games due to increased crossover between films
/ TV / literature & games
* More technology savvy attitudes
* Greater disposable income
* Emergent economic trends & their impact
* Growing internet penetration (particularly broadband)
* MMP gaming comes to India Ragnorak online & A3
Thus we see
growth in all areas - Wireless gaming, PC gaming, Console gaming, MMOG
(Massively multiplayer Online gaming) etc.
We expect
the industry to employ over 5000 professionals in 5 years time.
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"We
expect the industry to employ over 5000 professionals in 5 years
time"
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Milestone's
future business plans include?
Milestone's
entry strategy has been product development which will continue into the
future. We will continue to develop products for various platforms such
as PC & console in addition to making games for the downloadable segment.
We will continue to make games for international market as well as the
Indian market.
2 areas we
have diversified into include Wireless & Services. We plan to release
6 wireless games this year. Our services business will create artwork
for leading publishers worldwide. We are putting in place a dedicated
team for this.
Moving forward
our 3 primary businesses will be
1. Making
products for PC & Console
2. Making games for wireless
3. Providing artwork creation services for current & next generation
consoles
Anything specific to look out for from Milestone?
We will be launching our game within the next 2-3 months and it will be
upto international standards. Very likely to set a new benchmark in terms
of price of game vs game quality.
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