Casual Gaming in India

Summary of Findings

Casual Gaming Industry Overview

Casual Gaming in India

Mobile Casual Gaming

PC Casual Gaming

Consoles and DTH Casual Gaming

The Road Ahead

Presentation Plan

Casual Gaming in India

1. Industry Overview

2. Market Drivers and Inhibitors

3. Business Models

Casual Gaming revenue to quadruple by 2015

Casual Gaming in India is at a nascent stage but is

expected to grow significantly at a CAGR of 32% over

2010-15 period

76%of casual gaming revenue (on an

average) will come from Mobile over

2010-15

4X

% Break-up in 2010

% Break-up in 2015

… while the number of casual gamers will increase eight times over 2010-15 period

8 X

CAGR: 51.3%

% Break-up in 2010

% Break-up in 2015

By 2015, 12.4% of the total

online consumers will be casual

gamers

By 2013, Mobile Gamers (53.4%)will outnumber

the PC Online Gamers (46.8%)and will form the

largest segment

Casual Gaming in India

1. Industry Overview

2. Market Drivers and Inhibitors

3. Business Models

Four factors will be driving the Casual Gaming Market in India

Wireless Broadband is the catalyst for Broadband penetration

Wider choice of content across multiple platforms

Aggressive Marketing by Telecom Companies

Increasing penetration of devices

Availability of low-cost handsets will increase

the target market that can be addressed by the

gaming companies

Increasing penetration of netbooks and tablet

PCs will lead to higher number of people

accessing internet for online games

Launch of wireless broadband networks (3G

and 4G) will drive internet penetration. The

number of broadband users is expected to

reach 285.1 million by 2015, sharply up from

8.65 million in 2010

Given the low voice ARPU, telecom companies

are actively promoting games to encourage

their subscribers to switch to 3G, which is in

turn helping create interest in even the 2G

subscriber base.

Leading telecom companies have launched

app-stores offering games and application in

the last one year and a few more are in the

pipeline.

In India, all segments, namely, Consoles,

Mobile,

PC/Online and DTH are being promoted and

evangelized by different stakeholders, giving

consumers multiple choices to entry

Aggregated libraries of well known

international games are available across

multiple platforms – mobile devices, tablet PCs,

consoles etc.

… while three factors act as major growth challenges

Ease of Payment

Lack of local

Content

Piracy

Non-availability of a one-click

payment mechanism acts as a

deterrent for the sale of games

Indian consumers are not

comfortable in using credit card

for online transactions other than

air/rail ticket bookings

Gaming companies partnership with

Telecom companies for billing is

not mutually beneficial as

operators retain approx. 70% of the

revenue.

Piracy is a critical issue for the downloadable casual games on PCs, Consoles and Mobile

devices which heavily impacts the revenues for game development companies.

In Indian gaming market it is reported that for every one unit of legitimate copy sold there are

more than 10 pirated copies sold. Sideloading of pirated games when smartphnoes are

purchased is common

Majority of the games available

today are based on

international themes and

story-lines and invoke limited

interest from Indian consumers

Lack of casual games based on

Indian environment, society,

lifestyle and culture inhibit the

adoption in Tier-2 and Tier-3 cities

Casual Gaming in India

1. Industry Overview

2. Market Drivers and Inhibitors

3. Business Models

Indian casual gaming industry going towards a Freemium model

Business Model Adoption Trend for Mobile Casual Gaming

Present

Majority of the casual gaming companies have

adopted Ad supported/In-game advertising

and Pay-per-download business models

Future

Pay-per-Use, wherein the gamers pay for the

content as they use, and Ad-supported

business models are expected to be preferred

models in the near future

Expected M-commerce laws to have an

impact in the near future

Present

Majority of the casual gaming companies have

adopted Ad supported/In-game advertising

and subscription based business models

Use of Payment gateway is the preferred

mode for transactions

Future

Micro-transactions, Ad-supported and

Subscription based (all you can consume)

business models are expected to be preferred

models in the near future

Cash-cards which can be purchased at retail

outlets in lieu of cash is expected to gain

traction in the near future

Business Model Adoption Trend for PC Casual Gaming

‘Micro-transactions’ is a well tested and successful concept in Indian market

‘Sachet’ marketing in FMCG and retail segment

• ‘Micro-transactions’ as a concept has been successfully adopted by FMCG and retail

companies in India by launching most of their products in smaller packages

(‘sachets’).

• The concept has high awareness among Indian consumers who have adapted to the

process of buying goods in small and incremental quantities.

Cashing on the initial trial behaviour

• Indian consumers are highly conscious about ‘value-for-money’ and have a preference

to try-out the products initially before becoming a regular customer.

• The micro-transactions approach allows consumers to use and feel the product before

they buy the larger quantities of the same product or service.

Increasing product penetration in lower income groups

• A majority of Indians are in middle or lower income groups in Tier-2 and Tier-3 cities.

Given the high dependence and variability in the monthly family earnings, Indians

prefer to divide their purchases in multiple smaller amounts. This is unlike western

countries where people have the preference of buying products in bulk.

• The micro-transactions concept allows the product companies to target the middle

and lower income groups and increase the product penetration.Micro-transactions is an existing concept in India. The task ahead for Casual Gaming

companies is to identify the micro- transactable items and market them effectively

to the consumers.

Mobile Casual Gamers in India

Mobile Casual Gaming Revenue expected to grow at CAGR 27.5% over 2010-15

Up-gradation of infrastructure (3G and LTE) leading to availability of affordable

and stable mobile internet services will be the driving factors for mobile casual

gaming revenues.Note:* The total mobile gaming revenue is based on FICCI-KPMG report

3.4 X

Mobile Casual Gaming Revenue

Mobile Casual Gaming contributed

80% of the total gaming revenue in

2010 …

… however, this contribution is

expected to decrease to 60% by 2015,

which can can be attributed to the

higher adoption of the hard core

games over casual games

… while Mobile Casual Gamers are expected to grow at a CAGR of 60.4%

10 XMobile Casual Gamers

Ratio of the total online mobile subscribers to the mobile casual

gamers is expected to increase from 10% in 2010 to 20% by 2015.

3G will overtake GPRS as the preferred technology for mobile gamers by 2015,

primarily driven by higher speed, affordable 3G-enabled handsets, and decrease in the

prices of 3G services.

PC Online Casual Gamers in India

PC Online Casual Gaming Revenue expected to grow at CAGR 29.9% over 2010-15

3.7 X

PC Online segment will have a moderate increase in revenue in contrast to a higher increase in number

of users because of the lower ARPU, which can be attributed to the fact that games on PC are largely ad-

funded .

Majority of the growth in the PC online casual gaming revenue will come from the increasing adoption of

net-books and tablet PCs.

By 2015, 3% of the total online PC Gamers are expected to indulge in

Micro-transactions contributing 70% of the total PC Casual Gaming

revenue

… while PC Online Casual Gamers are expected to grow at a CAGR of 41.2%

~5.6 X

Approximately 80% of the total PC

Online Gamers in India are Casual

Gamers.

By 2015, the wired PC Online Gamers will decrease to

16% and more than 57% of gamers will use 3G network

due to the higher penetration of low cost 3G dongles.

LTE (4G), expected to be rolled out in the country by

2012, will further boost the shift to wireless broadband

network and will be used by 13% of the casual gamers.

Console Casual Gamers in India

Number of Console Casual Gamers is expected to grow over 100% on a year-on-year basis (2010-15) which

will provide a strong platform to casual gaming companies.

Casual gaming companies are marketing console casual games as a family activity thus expanding their reach

beyond individual gamers.

Average price of retail boxed games is currently USD 22 and is expected to decline to USD 16.47 by 2015

Console Software Gaming Revenue expected to grow at CAGR 79.9% over 2010-15

17 X

One of every three console

games purchased in India is a

casual game.

Direct-To-Home (DTH) Casual Gamers in India

Direct-To-Home (DTH) – An Emerging Segment for Casual Games

DTH segment is at a nascent stage but revenue from this segment is

expected to grow significantly at a CAGR of ~69.3% over 2010-15 period

3.3 X

2010 2015 E

DTH Casual Gaming revenue was USD 0.79

million (or 1.3% of the total casual gaming

revenue) in 2010 and is expected to reach

USD 10.98 million (or 4.5 % of the total casual

gaming revenue) by 2015. However, the

changes in ARPU can impact the projected

revenues

Telecom companies offering DTH services

such as Airtel are using their existing

relationships with Casual Gaming companies

and also, partnering with international gaming

companies to tap the library of the business

The Road Ahead

The Road Ahead (1/2)

Women Centric Games Localized Content

Current Scenario Current Scenario

Majority of the gamers currently are males

and the female segment has largely been

left untapped

Majority of the games available in the

market are in English language and based on

international themes.

Opportunity Opportunity

Higher proportion of women in India, are

housewives, who have spare time during day

hours, which they utilize for entertainment

Development of women centric games such

as based on TV-soaps – which have huge fan

following, will help the gaming companies to

target housewives in not just Tier-1 cities but

also Tier-2 and Tier-3 cities

Game creators can take cues from

Television, where incorporating local

language and socio/cultural context by

shows such as Indian Idol, Who wants to be a

Millionaire, India’s Got Talent have proved to

be hugely successful.

Development of games in local languages,

which are based on demographic, cultural

and social topics, can positively impact the

adoption and penetration of casual games.

The Road Ahead (2/2)

One-click Payment Mechanism New genre of Games

Current Scenario Current Scenario

Gamers are uncomfortable about revealing

credit card details for online transactions in

India

Majority of the games are arcade or puzzle

based games or adventure based games in

the 2D format

Opportunity Opportunity

Casual Gaming companies can partner with

banks to enable net-banking for online

transactions.

Operators and casual gaming companies

need to agree on revenue share which is

more realistic with global averages

Mcommerece , Google ‘s one click payment ,

pay pal are looking at Indian market to

enable payments and this will have positive

impact.

Casual gaming companies can partner with

content providers to develop games in

different genres – Augmented reality,

edutainment, event based games, location

based etc.

Development of games that provide near

real, interactive and engrossing experience

to users. This will help the gaming

companies in ensuring sustained interest of

the gamers.

Leading Companies in Casual Gaming in India

Note: The companies have been listed in alphabetical order and an Indicative List

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