Pokemon Go, the current biggest obsession on the planet, has unlocked a universe of possibilities for games.

A game can become a retailer’s ally to pull in people, it can be a marketer’s friend to reinforce branding, and a user’s resource to find a date! It’s no longer just a game.

For Indian game development companies, watching the Pokemon Go phenomenon with bemusement, its viral success spells some clear trends. For starters, the era of dominance of mobile games has begun.  

Screen shifts The fact that Japanese video-game giant Nintendo, which for long had refused to unshackle itself from its consoles-only policy, has hit gold with its fledgling move to mobile with Pokemon Go, means that the world will now tilt towards mobile games with greater velocity.

It’s in line with trends posted by research firm Newzoo, which, earlier this year, had said mobile games revenues would cross console and PC games in 2016. Newzoo’s reckoning is that mobile games will generate $36.9 billion in revenues while console gaming will rake in $29 billion, with PC games bringing in $31.9 billion.

The total gaming market size is expected to reach $99.6 billion this year, an 8.5 per cent growth — though with PokemonGo those estimates may need to be revised.

For games development companies based out of India, this is an important trend to take note of.  As Manvendra Shukul, CEO of Lakshya Digital, a company that does art and animation for global gaming giants, says an iPhone 6 today is as powerful as a Sony P3 console used to be. Add in virtual reality and augmented reality, the potential is enormous.

Rohith Bhat, CEO, 99Games, cites a Digi-Capital report to say that mobile games are beating consoles and online games software (though not console hardware) in value terms, already. “The report predicts that where mobile games took $3 of every $10 spent by gamers on software in 2015, the figure will go up to $4 out of every $10 by 2018.”

While several Indian companies are into game development, when it comes to playing, India is a gaming backwater — with neither consoles nor online games really big here. But things could change with mobile games, and it could spur development for local market.

Bhat points out: “If you compare the total time spent playing a game versus all other apps on a user’s device in India, smartphone users spend 48 per cent of their time on games. This number is 24 per cent in East Asia and 14 per cent in North America.”

“When we start building games that cater to the local market, we will see more monetisation,” he predicts.

Pariekshit Maadishetti, founder and Managing Director of Grid Logic Software, however, has a different take on the dominance of mobiles. He says the screens are going to keep shifting all the time. “Today it may be mobile, but with Android TV we will see migration into TV, and then there are car consoles that are taking off too.”

The creator of Taj Rummy, which can be played with stakes, says currently 57 per cent of his traffic comes from desktop, and the rest from mobile.

But in terms of revenue, with a gaming app getting built, 50 per cent revenue is now coming from mobile (earlier it was just 20 per cent).

Will Pokemon Go alter the thinking of Indian game companies? Ninad Chhaya, Vice-President - Games and Entertainment, Robosoft Technologies, says games like Pokemon Go help give ideas to gaming studios to innovate and experiment with emerging trends and technologies. He says the developer community is taking a closer look at augmented reality and location-based gaming, which has now come into mainstream, thanks to the game. 

Game development Shukul of Lakshya Digital points out that development costs for mobile games are far lower. A typical mobile game costs $4-6 million to make. A console game, on the other hand, can take up to $15 million, and there are games that have cost $80 million to develop. 

When Lakshya Digital first started in 2004, the development costs were just around $3-4 million. Rising costs have forced companies to look at markets such as India to develop.

There are three components to a game’s development — design, art and technology. The costliest piece is art, says Shukul, and that’s the space where Lakshya Digital is in. Most Indian development companies are usually in the technology piece.  

Bhat of 99 Games says the development costs vary from game to game. While really simple games can be developed for just ₹10 lakh, more complex games cost closer to ₹10 crore to build.

“The initial costs are towards animation, design and coding. Once you build a decent game, if the traction is good, the maximum spend will be on marketing and discoverability,” he says.

Striking the jackpot Game development is a hits-and-misses business with the misses really common. But as Bhat says: “Once you get it really right with one game, you can make a lot of money from that one game and then proceed to dominate that category.”

99Games had developed 15 games before it had a hit with Star Chef.

“Of the 15 games the company developed, five were decent hits, four gave us RoI, while the remaining were duds,” says Bhat.

As Maadishetti of Grid Logic points out, Pokemon Go’s seemingly overnight success is not really so.

The Pokemon franchise is 20 years old. “Any gaming company has to put in a lot of experience,” he says. The sobering reality is that only one in 10,000 games hits the superleague like Pokemon Go.