Saturday, March 23, 2024

How Recession is Affecting the Indian Gaming Industry

Recession, it’s almost like a buzzword these days. Its tendrils have encroached into every industry and the very lives of people all over the world. As far as the gaming industry is concerned on the global plane, opinion has been mixed. The optimists are of the belief that when people start getting cautious about the money they spend, video games are a perfect low cost entertainment avenue. The pessimists on the other hand believe that no industry is immune to the effects of recession and video games are one of the many things consumers will buy in smaller numbers.

Indian Gaming Industry Recession

As far as the Indian gaming industry is concerned, 2008 was a stellar year. Gaming awareness has gone up in a major way in the past year. Sony and Microsoft have done a good job promoting their consoles with TV ads, price cuts and bundled offers. Also, releases of major games in India happen much closer now to their international release dates. Which brings us to the question of how the global recession is affecting the gaming industry in India in general? To get a better perspective on this issue we got some responses from some of the honchos in the Indian gaming industry.

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Atindriya Bose, Sony Computer Entertainment Europe Limited said, “Console gaming industry is in a nascent stage and perhaps not the best candidate to evaluate the impact of recession in India. We are still witnessing healthy growth number in the sales of both consoles and games in the Indian market. But to state that gaming being recession-proof will be an exaggeration. The gaming market is in an early stage of development and hence even in the tight condition, there is enough headway to grow only the challenges to growth being more than before.”

Bose seems cautiously optimistic about the situation and perhaps right in stating that the industry in India is at a nascent stage, hence might not be the best candidate to evaluate the impact of the recession. However the rate at which the industry is growing in India perhaps a year down the line we will fully realize the effects on the gaming industry here.

Ajay Khanna, ex-GM, Electronic Arts India commented, “Globally, the interactive gaming industry has been less affected than its traditional counterparts, in previous recessions as it is a far more economical form of entertainment, and we expect that trend to continue. In India, interactive gaming is a new and exciting form of entertainment for tech savvy consumers, and EA has seen extremely strong growth this year. All our big titles such as FIFA 09, Need for Speed Undercover, NBA Live and our new franchises like Spore, Mirrors Edge and Army of Two have performed pretty well. Although there may be an overall slowdown in the economy, we are optimistic that the interactive gaming sector, currently estimated at Rs 100 crore will grow by close to 50% and, will continue to outperform the overall entertainment sector throughout the year.”

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Khanna has referred to the past when saying that the gaming industry has traditionally been less affected than other industries in the entertainment field during the previous recession. The previous recession, which occurred around the year 2000, was a time when computers were just beginning to enter into Indian homes. A time when dialup internet was a luxury in the country and gaming here was all about Dave and a little Mario. The gaming landscape of today is completely changed now. Gaming is an exciting new form of entertainment for the tech savvy consumer of today and EA seem to be reaping the benefits.

Ashim Mathur, National Marketing Manager, Microsoft Entertainment and Devices Division, Microsoft Corporation (India) Pvt. Ltd explains, “Gaming is the current buzzword for entertainment in India and at Xbox 360, it is our constant endeavor to make gaming an accessible entertainment option for our consumers. Although the current recession may impact consumer spending, the fact that India is rapidly witnessing a movement towards new options for entertainment and recreation and gaming has emerged as the leader of the pack which will drive Xbox 360 to continue as one of the leading entertainment option.”

Mathur believes that as Indian consumers started looking for newer options for entertainment, gaming emerged as the top dog and with considerable headway yet to be made. This he believes will drive the Xbox 360 forward even in the current economic scenario.

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Rohit Sharma, COO, Zapak says, “The gaming industry worldwide is recession proof. Gaming has always been the stickiest form of entertainment. People might cut down on going for movies or cafes, but not gaming. There are communities and virtual worlds formed by gamers and it is very difficult for them to let go of the same. As far as Zapak is concerned, customer acquisition on the portal has not been affected. The average revenue per user from our gamers in Zapak Gameplexes has increased, as have our advertising revenues. All our businesses are doing well. We have recently launched www.zapakworld.com in order to acquire a global footprint. All in all, there is a lot to look forward to and we are not slowing down.”

Sharma from Zapak is the most optimistic of them all. He believes that beyond the entertainment value of gaming it’s the social and community building aspect of games that will be a driving factor that will help tide it over the recession period. Though consumers may cut down on entertainment options like movies, cafes and travel, people will never let go of the strong sense of bonding they feel as part of a gaming community and their virtual avatars in a virtual world. Gamers are spending more time than ever in gaming cafes and portals run by Zapak. He believes that they will only move forward from here and there is no question of slowdown.

To conclude like any emerging trend there is a period of tremendous growth in the nascent stages and most current economic factors that might affect other industries tend not affect them. It’s only when the gaming industry here reaches a plateau that we might be able to see any tangible effects of a global event like the recession on it. As it stands the gaming industry here is still in its growing stages as most of the industry pundits seem to agree, so perhaps only a couple of years down the line we might truly understand the effects of the recession on the Indian gaming industry.

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    By Shantesh Patil

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