Player-to-payer conversion not happening yet; IGDC to evolve into association early 2020
The gaming industry in India has come of age. At 30 crore players, bulk of them being mobile gamers, and 300 game development companies, India is among the top-5 gaming destinations in the world.
As it grows at a compounded annual growth rate (CAGR) of 22 per cent in terms of revenues and the number of players growing in multitudes, the industry faces key challenges of player-to-payer conversion and talent crunch, according to Rajesh Rao, Chairperson of India Game Developer Conference.
A soon-to-become association on the lines of Nasscom, the IGDC has been working to bring together the ecosystem players onto a single platform to share ideas on developing the industry and discuss challenges that the nascent industry is facing.
Taking time off on the final day of the just concluded two-day IGDC conference here last week, Rajesh discusses the key roadblocks.
Rajesh, one of the earliest players in the Indian gaming industry, founded, ran and sold his game development services company Dhruva to Starbreeze Studios, a Stockholm NASDAQ listed games company in 2017. It was later acquired by Rockstar Games, makers of Grand Theft Auto and Red Dead Redemption, this year.
If he is not advocating the issues related to the gaming industry, Rajesh is spending his time playing golf.
“Typically, 1-2 per cent of gamers globally buy things like costumes or weapons while playing. It helps the game developers make money. In India, it is not happening at that rate. Though they are making money through the advertisements placed in the game, it is not enough. The micro transactions have to happen. It needs conversion of that 1-2 per cent of gamers to buy things as they play,” he says.
He, however, feels that it is a matter of time before purchases begin. “It is all about that maiden purchase. If that is breached, there is no stopping. I expect this to happen any time here,” he says.
The alignment of Google Pay with Google Play (the Android app store owned by Google) will be a game changer, he thinks. “Google Pay is catching up very fast in the country. It will help (the gaming industry),” he points out.
For now, it is frustrating. Players are there and their numbers are growing by the day. Downloads are happening but the percentage of gamers (making micro transactions) is not there.
According a KPMG report, the Indian gaming industry, which was estimated to be at Rs 4,400 crore in 2017-18, would reach Rs 11,900 crore by 2022-23, growing at a CAGR of 22 per cent. The number of gaming companies went up by 10 times to 300 in the last 10 years as the number of gamers catapulted to 30 crore this year from two crore in 2010.
With data becoming cheap, gamers don’t mind downloading games of huge sizes. Citing the example of PubG, Rajesh said the number of serious gamers and casual gamers is on the rise.
According to Rajesh, the industry is not getting the right talent that it needs. “There is not enough training happening. The talent that should be in the industry is not there in the industry. Those at some training institutes have never developed a game in their lives,” he says.
“The industry is ready to help the educational institutes train their students in the required skills to tap the opportunity in the gaming sector,” he says.
Investors, who used to think twice before investing in the industry, have now realised that it is time to invest. “It used to be a challenge. Funds were not coming in. But (lately) there has been a steady flow of investments,” he observes.
The IGDC, which used to work under the aegis of the National Association of Software and Services Companies (Nasscom), will soon evolve into an association. “This is long overdue. We expect it to happen early next year,” Rajesh Rao says.