Ban on Chinese apps opens up opportunity for India play

Even as the government’s ban of PUBG will open up doors for Indian gaming start-ups, it will take one to three years for them to achieve scale and size.

A few days back, the government banned 118 Chinese apps and the most high profile of them was PUBG “The Indian domestic market in the last few years is growing but still small when compared to developed ones,” said Manish Agarwal, CEO Nazara Technologies, which has developed games such as Chhota Bheem and is backed by investors such as Rakesh Jhunjhunwala. The gaming industry was pegged at ₹6,200 crore in 2019 and is estimated to grow four-fold to ₹25,000 crore by 2022.

Multi-year play

Games such as Rogue Heist , a multi-player online shooter game, designed and developed entirely in India, and others similar to this are expected to fill this gap. This game development, especially the ones such as PUBG or FIFA, takes years and requires constant capital flow and perseverance. “It takes us 3-12 months from concept to prototype stage and there are subsequent tweaks needed to keep the game running,” said Agarwal.

So, while many start-ups came up to fill the void left by TikTok, can PUBG’s shoes be filled?

The answer, according to industry watchers, could be a one to three-year wait. However, there are many factors at play, from the cost of game development, finance costs to the per capita spend on games

Santosh Pai, Honorary Fellow at the Institute of Chinese Studies said it’s difficult to make a single game because skills required are expensive, so a team must be developed for a string of games. It’s more like a production house constantly producing movies, so home-grown replacement for PUBG will take time. Add to that, larger game development companies have scaled up, supported by large investors such as Tencent in PUBG and EA Sports, with revenues of $5 billion in 2019.

Early entrants

Getting to that level is still some time away as gaming adoption in India went mainstream only with the advent of smartphones in the last decade.

“In India, people started playing on their phones and we see casual gamers as early adopters,” said PR Rajendran, Co-Founder and CEO, Nextwave Multimedia, maker of World Cricket Championship (WCC), a cricket simulation game with 130 million installs.

This trend seems to be driving companies such as India’s first gaming unicorn Dream11 (which had revenues of ₹200 crore in 2018), Mobile Premier League and PokerDangal, in the card game categories. “One would need to understand the nuances of customer preferences and behavioural patterns, apart from the technology skills and ability to innovate rapidly. For example, gaming around sports, especially cricket, cards and other allied themes seems to be popular,” according to Raja Lahiri, Partner, Grant Thornton India.

The number of people playing online games is set to cross 300 million. “As affordable internet connects people from tier-2 and -3 cities through their smartphones, we can expect a lot of casual and social gamers joining the online mobile gaming market,” said Rajendran.

So, are investors lining up? “Demographics in India heavily support the demand for newer and more games,” said Arvind Sivdas, Co-founder, SuperCric, which got funding from Nordanvind Investments. Gamezop, a New Delhi-based startup, raised ₹32 crore ($4.3 million) in Series A round led by global e-sports fund BITKRAFT, and participation from Velo Partners and FJ Labs.

COMMENT NOW