League of Extraordinary Gamers, a gaming centre in Bengaluru’s tony suburb of Indira Nagar, is humming with activity on a Thursday afternoon. Bathed in a mellow green light, it has the slow buzz of gamers murmuring to each other on their headsets mid-game. A quiet group of spectators is transfixed by the action on the screens.
The gaming centre, better known as LXG, was upgraded last year with the latest gaming gear and enhanced connectivity. Now, with dozens of stations, this gaming enclave is a nod to the growing interest in online gaming in India. From games as simple as Candy Crush and Subway Surfers played casually on smart phones to Dota 2 and Counter-Strike duked out by hardcore players, a gaming revolution is on in India.
It isn’t just swish places like LXG that are attracting swarms of gamers. A slew of esports companies like Mumbai-based Cobx Gaming and Bengaluru-based GamingMonk are queuing up to attract the attention of curious and professional gamers alike. The industry struggled for growth for much of the past two decades — bogged down by poor connectivity and costly hardware — but there’s a spring in the step of companies and gamers.
Older companies such as Nazara Games, having raised $51 million in funding from IIFL Special Opportunities Fund, is finalising a public listing, even as others such as Cobx have announced esports championships with prize money topping a crore of rupees. Meanwhile, JetSynthesys, which makes digital products and platforms for mobile phones, is using gaming as an arrowhead to make a technology leap. The firm has sewn up several joint venture agreements to deepen its presence, besides launching hit games such as Sachin Saga, with a couple of million downloads in under a month.
“The Indian gaming industry has taken its time finding its secret sauce,” says Rajan Navani, vice-chairman, JetSynthesys. “But the ingredients are all there now for the industry to grow rapidly.” For companies like his, this means phones have become cheaper and creaky wired broadband that the industry struggled with has given way to faster mobile broadband, with Reliance Jio acting as a game changer. The centre of gravity has moved from costly, console-based variants to an array of mobile phone-based games.
Over the past two decades, gaming companies have slowly moved from outsourcing backend work to India to developing complete games from here (Zynga, for one) — and are now eyeing the local market. For years, the local market was negligible; consoles were expensive and access was limited. Then, PC gaming caught on, but computers too were costly (even today a good gaming rig can cost around `1 lakh) and the best gear — mouse, monitors, ear pieces — was unaffordable or simply unavailable. Even when broadband entered the scene, connections were slow and spotty. It is only in the last two years that a new wave of mobile gaming has caught on.
Along the way, other pieces of the mobile gaming market, such as small payments for games (or in-game power-ups and lives) have begun to gain traction. However, experts agree that there’s a long way to go. As Indians prefer to play free games, gaming firms, mobile operators and web giants such as Google are still figuring out how to squeeze more out of a growing band of gamers.
Google, for one, thinks that there’s some forward momentum. “Indians download over a billion apps from the Play Store every month. With a user base so large, there is always tremendous opportunity for games of every genre to do well,” says Karan Gambhir, head of business development, Google Play Apps & Games. “We are always looking at ways to make the Play Store more relevant from every angle possible — payments is a critical one. Over the last year, we have launched carrier billing across Airtel, Idea and Vodafone and launched gift cards across 4,000+ retail locations and digital codes available at major online retailers.” Google is looking to solve other pain points for gamers too, he says. For one, Google works with game developers to have offline versions of their titles. It has also launched a guideline to help gaming companies build their products for markets like India, plagued by patchy connectivity. “With the latest version of Android, we also announced Android Oreo (Go Edition) for devices that may not have the processing capabilities of high-end devices. Games made for these devices will be built to work well even on smartphones having modest specifications,” he adds.
As the market has found fresh legs, investors have begun to hasten the pace of deal-making, Investments have begun to flow and M&A has begun to gather steam. Rajesh Rao, founder of Dhruva Interactive, a games studio in Bengaluru, says these are good omens. “After two decades of struggle, there have been a few signs — acquisitions, fund raising and establishment of joint ventures — that point to the industry finding its feet and preparing for rapid growth,” he says. Sitting in a room called The Birdcage in one of its city offices that was previously a foundry, Rao admits that a decade ago, the Indian gaming market was oversold to investors and with expectations failing to match reality, they stayed clear of it.
Dhruva, for example, was sold to Swedish art production company Starbreeze in December 2016, having raised little VC monies during its two-decade existence. “We sold out for a small profit,” he says, as coders and game designers get down to work. “Early players like us have put in the yards… now others can thrive.” Nazara Games, which is eyeing a `1,000 crore IPO, has already begun to hunt down these opportunities. The firm, backed by the likes of WestBridge Capital and stock market maven Rakesh Jhunjhunwala, has acquired Nodwin Gaming and taken a significant stake in HalaPlay, as it builds out a global gaming business from India. It is already in over 60 countries, with its games downloaded some 22 million times on Google’s Play Store.
“M&A activity is a welcome sign in any vertical as it exhibits the confidence of investors in the growing domestic market and the capability of the local talent to create scalable and sustainable business models,” says Nitish Mittersain, CEO, Nazara Games. “Nazara has been acting as catalyst to accelerate the development of gaming ecosystem in India by investing in promising startup teams, with our recent acquisition of Next Wave Multimedia and Nodwin Gaming.” The firm is far from done; officials say they continue to be on the lookout for M&A and investment opportunities within and outside India. “The mobile-first digital entertainment opportunity in emerging markets reaching out to over 2 billion consumers is massive.”
Changing macro factors are aiding the growth of the gaming market, but there is also an attitudinal shift that is helping the cause of these companies. Vageesh Bhan, 27, is a gamer who has evolved into a sought-after voice artist for many gaming studios. As a high schooler, he recounts being caught and dragged out by the ear from a gaming cafe a few days before his board exams. By that time, he and his friends were spending an inordinate amount of time at gaming joints. While he played a fair share of games — ranging from Duck Hunt to Dota — his future lay as a games caster and voiceover artist.
Ashwin Haryani, cofounder of GamingMonk, has seen the shift happen over the last couple of years. He says in several schools in Delhi, administrators are proactively adding gaming zones for students rather than trying to make them stop playing. “They want to organise tournaments for their students on campus.”
Play Time Numbers too confirm that the tide is turning in the gaming industry’s favour. A survey conducted by Newzoo, a provider of gaming industry market intelligence, reveals that 83% of the total online population in India plays games across platforms such as mobile, laptop or console, with an almost equal representation from men and women. However, the gender gap is relatively narrow in the mobile gaming segment compared with laptops and consoles. 83% men and 77% women play mobile games. For more than one-third Indians, mobile gaming is part of their day-to-day life — 40% men and 35% women play mobile games at least five days a week.
As more Indians are more game to play, companies are piecing together an assortment of business models to snare the growing audience’s interest. While some companies such as Cobx and GamingMonk are building gaming platforms and infrastructure, others such as Mech Mocha and 99Games are focusing on the mobile gamer. Chennai-based startup Playtonia, meanwhile, has two revenue streams — one focused on organising large esports tournaments and the other on giving gamers a cutting-edge playing experience. While about 22,000 gamers have used the firm’s services so far, the founders are aiming for the moon. “We want to have a million users on our platform by 2021,” says Anshumann Pandey, cofounder, Playtonia. “We think the esports revolution is just getting started.”
“Indian gamers have a long way to go to match the skills of their global peers,” says Rajdip Gupta, cofounder, Cobx. “We want to provide the platform and infrastructure for them to take this leap and become global brand names.” Already, some 250 teams each on Counter-Strike GO and Dota 2 flock to Cobx’s gaming centres in Mumbai — with a firm eye on snagging top billing at pro gaming events.
There’s plenty of reason to consider gaming as a career — members of teams such as Signify and Entity can easily out earn their peers who are in regular 9-to-5 jobs, thanks to salaries, sponsorships and prize money. Improving one’s game play also means a better chance to play at global events such as the International Dota 2 Championship in Seattle where the prize money topped $24 million. In India, Cobx Masters 2018, with a total prize money of Rs 1 crore, may be the first step towards big-ticket events in the country.
Not everyone in the esports segment want to chase a small band of hardcore gamers. Gaming Monk wants to carve out a space for casual gamers. “Rather than focus on hardcore professional gamers,” says Haryani of GamingMonk, “we want to build an ecosystem to bring more casual and semi-pro players on all three platforms — PC, console and mobile gaming.”
The company has organised eight offline tournaments so far across popular games such as FIFA, Call of Duty, Dota and mobile games such as Clash Royale. Its online portal, with a subscription-based signup, has nearly 9,000 users, with lawyers, management consultants and bankers lining up to play. The goal, according to Haryani, is to push casual and infrequent gamers who play Candy Crush and Temple Run to graduate to Crash Royale and beyond and start paying for game play along the way. GamingMonk holds dozens of smaller competitions — with prize money of Rs 50,000-60,000 — to entice casual gamers to up their game.
Meanwhile, game developers such as Moon Frog, 99Games, PlaySimple and Mech Mocha have all latched onto India’s smart phone explosion to build out their gaming businesses. “All the action in mobile game development has happened over the last couple of years,” says Arpita Kapoor, CEO, Mech Mocha. “We are focused on games targeted at the Indian market either by licensing them from global companies or by building original titles .
” Already, the firm has worked with Halfbrick Studios in Australia, to license its Jetpack Joyride game (500 million-plus downloads and counting) and is looking at more such associations. “We are working with our global partners, including Chinese gaming companies, to bring titles to the Indian market and to publish them post detailed localisation. If that works, it will open up opportunities in Japan and South Korea for us.”
Across formats, India’s gaming revolution may just be getting started.
The Zynga Thing
A little under a decade ago, Zynga and its game Farmville, which everyone loved to hate, were unmissable for anyone going online. While Zynga opened an R&D unit in Bengaluru several years ago, the company’s fortunes wavered once the Farmville fever died down and it failed to replicate the success. While the India centre played a pivotal role in the development of Farmville and many other games, employees have used the experience of working on core product development for a global gaming company to weave entrepreneurial ambitions of their own. Senior Zynga India alumni have blossomed in other roles too, with Srivatsa Narasimhan, for example, running the India operations for US-based gaming firm Narvar. Companies such as Octro, Moonfrog Labs, PlaySimple, Red Monster, Six Red Guns and Cucumber Town have also leveraged their experience with the gaming firm.