The shift in gaming industry from Pacman to Pokemon

September 18-2018
From ‘Packman’ to ‘Pokemon Go’: How the digital gaming industry is shaping in 2018?

Gone are the days when we used to only play pocket video games. With the advancement of technology, the gaming industry has evolved with time and the gaming enthusiasts have witnessed the transformation from black and white brick games to real life digital games. With the increase in the number of internet connectivity and affordable smart phones, the digital gaming industry has witnessed an upward graph over the years.

Bhavin Pandya

Since the digital gaming industry in India is emerging immensely, Play Games24x7 co-founder and CEO Bhavin Pandya believes that it will grow three times over next four years with an estimated $513.4 million growth in 2017 (as per the Statista report). Apart from other factors like new and improved digital payments, affordable smart phones and devices, the primary reason for the growth is the internet penetration in the country. Speaking on the growth Pandya explains that Play Games24X7 has witnessed year on year growth for last five years. “Our belief is deep-rooted in the fact that people like playing games that they grew up playing.

Localisation is the key, and the user trends have confirmed the same. It hence becomes simple to relate to the game and as a result, makes the player comfortable to try the game once,” said Pandya. He enlightened us more on the value of the digital gaming industry which was $430 million in 2016 and said, “The estimated worth of the industry will be $981 million in 2021. Since the digital gaming market in India is dominated by mobile gaming as it brings 50 per cent of revenues. As of mid-2016, India ranked 6th among the global markets when it came to mobile game installs. As per this, 2.9 per cent of global mobile game installs occurred in India”.

The internet has been an absolute game-changer for almost all the digital businesses. Since the data rate has been sloshed down considerably with the advent of Reliance Jio, the growth rates in Indian digital gaming industry is also booming.

Sourav Mukherjee

As Netscribes founder and CEO Sourav Mukherjee said, “The number of users on gaming networks such as Games2Win and Nazara Games has nearly doubled since the launch of Reliance Jio’s 4G data services. Total downloads of the top 10 games on Apple’s and Google’s app stores have also seen a spike. In fact, According to App Annie, India is the largest driver of download growth on Google Play. It’s clear that with Reliance Jio coming into the picture, digital gaming, especially mobile gaming, is witnessing tremendous growth.”

Pandya also estimated that by 2022, the mobile penetration in India is expected to reach over 90 per cent. This demonstrates a huge potential for gaming companies and marketers, as they can reach consumers which they couldn’t before.

As Jio entered the Indian market, it took over the rural and small towns, due to its affordability.  Not only that the budget-friendly mobile devices has spurred the growth of mobile users. This ease of mobile accessibility has changed the mobile consumption habits and will continue to change as technology evolves alongside. India has become the world’s fastest growing market for the mobile apps. As per the KPMG Media and Entertainment Report 2018, the industry grew 35.1 per cent in FY18 to Rs. 43.8 billion. Mobile gaming contributed to 89 per cent of this gaming revenue, while 90 per cent of online gamers used smartphones and tables to play online games.

Pandya further put light on the fact that many households may not have access to a desktop or laptop but have multiple mobile devices, games today need to have a mobile-first approach. It allows companies to reach out to masses and unlock the potential of an already engaged audience. Not only that but the games played in clubs or in a social setting are now accessed online and played on smart phones.

As the Indian digital gaming industry growing rapidly, there are major problem areas that hinder its growth.

  • Despite India is the world’s second largest internet connected population but Mukherjee shared that, “India ranks 16th in terms of the gaming revenues according to Newzoo rankings. So, though India’s gaming market is huge, it lags in terms of paying customers.”
  • Though the internet and smart phone penetration levels are rapidly increasing but it is lower than in developed countries. “Monetization of a game is a problem in the Indian market as most Indian gamers like free to play games and rarely make in-app purchases,” added Mukherjee.
  • The piracy of games is out of control.
  • Lack of capital/ funding is also a major challenge, given the fact that a lot of investment in infrastructure is required to provide immersive gaming experiences. Above all, the lack of proper laws and regulations for the Indian digital gaming industry is also negatively impacting the market.
  • Building awareness without spending much on marketing is one of the biggest problems. As Pandya believes, marketers need to find ways to move the players through the funnel from signup and install to becoming paid players. He also enlightened us about the different genres of players-one where players can win real cash and one where they cannot which is also known as freemium gaming. “In the former, however, in India, only games of skill can be offered for real money where players can actually win money back. Any game can be characterized as a game of skill or a game of chance. People tend to stay away from games, where you don’t have any control over the outcome. However, there are games like rummy, that is skill based and even playing it for money is not gambling. However, acceptance from the public has been gradual. One way to tackle perception would be through regulation. The Rummy Federation has been formed to protect both companies and players. However, there is still a long way to go,” added Pandya

With the technology innovation, the trend of the gaming industry is changing continuously. From Pacman to PokémonGo, the transformation in the gaming industry is unimaginable. The AR game, Pokémon Go, was extremely popular among Indian gamers and was one of the top-grossing games in the Indian digital games market in 2016-2017. Thus, Mukherjee believes, “The year 2018 is expected to see a lot of AR/VR games emerge, even from local game developers like Paper Boat apps.”

As the AR/VR headsets are demanding, there’s a growing market for AR and VR game content. “Indian game developers like Empower Labs are investing in producing VR games, so this genre is also expected to see an uptick. However, due to the high cost of VR headsets, we expect their popularity to be limited to a small segment of gamers that visit gaming parlours and cafés” added Mukherjee.

Being one of the digital gaming leaders  Pandya emphasized that mobile game developers have started building games that bridge the gap between real life and virtual world through augmented reality games. It is these games that can be used to drive real change in consumer behavior as gamification through AR or VR and can help marketers sell products better as well. I firmly believe that both AR and VR will become a big success in the coming years.

Both Mukherjee and Pandya said that localising the gaming content as per the regional interests are the key area that game developers are looking for. Be it Ludo, Snake Ladder, Teen patti, Rummy or Poker all are coming under the digital gaming roof. “Our home-grown studio, Ultimate Games brings together popular Indian games like Teen patti, Rummy, and Poker, all under one platform,” said Pandya .

Indian movie games like  Bahubali, Bal Ganesha, sports like Kabaddi are also getting popular among the game enthusiasts. “Competitive online gaming is another category that’s extremely popular in the Indian market. Indian companies like Nazara Technologies, which recently underwent an IPO, are investing in the development of eSports games. eSports, which involves multiplayer video game competitions, is a major focus not just for the Indian gaming industry, but the world over. In fact, it is emerging as a lucrative career option for young gamers who make up for over 80 per cent of India’s gaming population. India’s participation in professional gaming teams has increased over the years, driven by the advent of high internet speeds such as 4G and FTTE,” said Mukherjee.

According to Pandya, a lot of international funds flowing into the game studios in India  are set to innovate and disrupt the mobile games industry, like Tiger Global funding Play Games24x7 recently.

“In the coming years, the mobile game space is going to heat up even more. The companies focusing on monetisation will survive in the long run,” added Pandya.  Thus, the priority focus of the game developers in 2018, is to develop games which will reach more people especially the ones who are interested in playing games but have never tried. “This gives a stupendous opportunity for us, to think innovatively and design unique gaming experiences that the players would always be interested in. The rummy industry and the freemium mobile games segment growing substantially in the next five years, however, for the latter to grow, payment options through the app stores will have to evolve considerably,” added Pandya.

Considering all the facts in the digital gaming industry,  Animationxpress asked Pandya and Mukherjee where the digital gaming industry will be in next five years down the line, to which Pandya said, “The focus is to build a direct relationship with your players, making it simple to reach out to newer players and allow them to engage with the game and find value in something that they truly care about.”

“The Indian digital gaming market will be worth over a billion dollars in the next five years,” Mukherjee concluded.