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Boom awaits Indian animation, gaming industry: Nasscom

January 12, 2006 16:28 IST

A study by the National Association of Software and Services Companies has revealed huge growth potential for animation and gaming industry in India, with revenues expected to reach $1.25 billion by the year 2009.

The report, unveiled at the two-day Animation India 2006 conference organised by Nasscom in Hyderabad on Thursday, forecast that the Indian animation industry would reach a turnover of $950 million whereas the Indian gaming industry would notch up turnover of $300 million by 2009.

Speaking at the conference, Nasscom president Kiran Karnik said: "India's expertise and creative skills, combined with the entrepreneurial drive of its companies, make it well positioned to tap the potential of this growing global industry."

In his view, the rapid growth of mobile telephony, increase in personal computers and the greater use of animation content would fuel the growth of the domestic market too. "If India focuses on developing the talent pool and leveraging our cost competitiveness, animation and gaming look like the next promising fields," he observed.

Nasscom study pointed out that India is fast going up the animation-outsourcing ladder. Though a recent entrant in the global animation scene, demand for India's production services is growing at a fast pace. With global entertainment majors such as Walt Disney, Imax, Warner Brothers and Sony signing up huge contracts with Indian animation companies, local animation design studios are gradually establishing their credentials overseas and building their skill sets in this high potential global market.

The report noted: 'India ranks high on its skill pool and familiarity with English language makes it a perfect animation outsourcing destination.'

Animation India 2006 also deliberated on the strategies that need to be followed and the roadmap for the growth of animation industry.

"The boom is not only seen in the animation industry. The growth of the mobile industry has led to a rise in demand in the gaming industry as well. India being a very competent nation with technology has an edge over others in terms of the time involved in game development," the Nasscom study said.

Games developed in India have been successful internationally and, therefore, are enhancing India's image as a country with the technical and infrastructure capabilities to provide gaming-related services that meet international standards.

With the growing business in animation and gaming, an emerging trend that can be seen in the market currently is that a number of Indian companies are adopting a co-production business model from an outsourcing model.

Shift to the new business model would drive motivation of industry players and compel them to perform bigger and better business.

"Going forward, India is expected to position itself as number in the animation market riding high on its talent potentially and quality work it offers the global market," the report explained.

The Nasscom study estimated that the global market size of the animation and gaming industry would witness an annual growth rate of 8 per cent and reach $75 billon by 2009.

Based on this, the global animation market (from the developers' perspective) is expected to increase to $35 billion by 2009 from $25 billion 2005.

The size of the Indian animation market was estimated at $285 million (from the developers' perspective).  It is expected to witness a CAGR of 35 percent from 2005-09 and increase to $950 million by 2009. Similarly, the market for gaming industry is expected to witness a CAGR of 78 per cent and reach $300 million by 2009 from $30 million in 2005.
Syed Amin Jafri in Hyderabad