Enter the Digital Playground
Late
last year, it was an ecstatic moment for tech marketers when Halo 3, a
video game developed for Microsoft Xbox 360 console, grossed $300
million worldwide in its first week of launch. Even a big Hollywood
movie will struggle to do that kind of business. Computer video gaming
is a new-generation craze that has its own blockbusters.
Recent
big global hits include Enemy Territory, Spider Man: Friend or Foe,
Guitar Hero III, Heavenly Sword, and Fracture: Terrain Demolition. These
are produced by players such as Microsoft, Activision, LucasArts, Sony,
Nintendo and Disney. According to DFC Intelligence, a global digital
games market tracker, the worldwide video game market will reach $47
billion in 2009. This includes revenue from video game hardware and
software, dedicated portable system hardware and software, PC games, and
online PC and console games. And the combined cumulative worldwide sales
for Microsoft Xbox 360, Sony PlayStation 3 and Nintendo Wii systems are
expected to be 180-210 million units by 2012.
But
these figures hardly make any sense for the Indian market that has
mostly relied on low-cost PCs, which are not capable of running high-end
games because of their weak graphics/multimedia performance. Of nearly
600,000 home PCs sold annually in India, barely one-tenth can handle
processor-burning video games. And sales of gaming consoles can be
counted on your fingers.
In
India, services like Zapak, Yahoo! Games, and Indiagames are offering
digital games-some free, some paid-mostly targeting young consumers.
However, the market is in its infancy, as most consumers are interested
only in "casual" games like car racing, crossword, sudoku and so on. But
global markets are fast moving up the value chain by offering "epic
games" (like Halo 3 and Heavenly Sword) that use high-end technology for
development.
Can
Indian entertainment companies ignore the promise that video games
offer? No. Simply because India has a huge potential consumer base.
Currently, the Indian market is in the "casual" games phase. It's easy
to develop these cheaply. But they are rarely addictive, and command low
premiums. Indian entertainment marketers should focus instead on
lucrative high-end games. And they should be prepared to spend on
product and market development. It's estimated that massively
multiplayer online games (MMOGs) that are played on dedicated systems in
gaming parlours or on expensive gaming consoles like Xbox, PlayStation
or Wii consume over $20 million per game (enough to make a couple of big
Bollywood flicks) as development cost. And they're very high priced:
$20-60 per game in the retail market. So, if there are not enough
consumers for them, it doesn't make sense to develop such games. Market
development, therefore, is crucial.
Thriller film franchises, of course, are the obvious partnership deals
to strike. But here, too, one should not assume that readymade character
or concept fame via the silver screen will translate into success
without any of a game's own thrills. Global competition is high, and
production is a stiff challenge. Top-class "epic" games can take a
couple of years to make-the process is even more elaborate than a film,
with animation software and special effects to go along with the game's
"script". Game developers tend to be specialised units, such as Bungie
Software (of Halo 3 fame), id Software and Ninja Theory. Microsoft is
trying to create an "open ecosystem" by inviting gamers to develop games
for its Xbox. The future is big. It is also a 21st century opportunity
for Indian developers to combine Indian software development and
entertainment industry skills to compete for the big money.
This article was written by
Rakesh Raman
for
his column Technophile in The Financial Express newspaper. It’s also available on the newspaper’s
site, at:
http://www.financialexpress.com/news/Enter-the-digital-playground/290724/0
It was republished by Yahoo! India
Finance site, at
http://in.biz.yahoo.com/080331/50/6s9dw.html
Rakesh Raman
is the managing
editor of My Techbox Online.
