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School of Computer Graphics TM -NASSCOM Research Report The Animation and Gaming Industry in India – A report by Ernst & Young The animation and gaming industry has shown resilience in the face of the current economic downturn, growing by over 20 per cent during 2008. India is now seen as a leading destination for high end, skill based activities. The Indian animation industry is estimated to grow at a CAGR of 22% and gaming industry is estimated to grow at a CAGR of 49% by 2012. Over the years, the Animation & Gaming industry has seen the entry of many global majors who have tapped into India’s talent pool for offshore delivery of services. Companies have also started to focus on improving quality and the creation of original IP. New business models have evolved in the marketplace, to successfully tackle current challenges such as piracy, lack of effective distribution etc, which has led to increased market penetration, and heightened awareness about the animation and gaming industry. The Animation & Gaming industry is a significant user of technology, and can further showcase India’s well established credentials in the technology and services offshoring space, in addition to playing a seminal role in developing India’s domestic media and entertainment industry. It is clear from the report that the relative size of the gaming industry compared to animation in general is smaller here than in, say, Europe or the US. However, the expected growth rates will tend correct this. It was stated that currently 15,000 people work in animation and gaming in India, but the demand is for a similar number in the next three to four years. A couple of people on the panel discussion following the presentation complained of the often poor education in some institutes offering course in animation. To help correct this, NASSCOM is helping develop a system of accreditation, which would help improve standards and weed out the poor institutes. Currently, 90 per cent of Indian animation revenues come from international sources, and this makes the industry vulnerable when economic problems hit the US and Europe. NASSCOM therefore intends to encourage the government to make certain tax concessions and other moves in order to help develop local demand. In analysing the gaming industry here, NASSCOM place PCs (13 per cent) in last place, after online (22), mobile (26) and consoles (39). However, this measure of market share is based mainly on software sales, and with the amount of piracy on the PC, may not be reflective of actual real-world data. NASSCOM also hopes the government and industry will work towards combating this piracy. Animation, gaming jobs set to double by 2012: NasscomKOLKATA: The animation industry is likely to have the going good in respect of jobs. Nasscom's projections suggest that employment in this sector will double from 14,700 now to 29,500 by 2012. Similarly, the gaming industry too will create a huge number of jobs in the next three years, with the projections being 10,700 jobs by 2012 from a meagre 2,300 people now. Responding to a ET questionnaire over phone from Delhi, Sangeeta Gupta, vice-president of Nasscom said: "The animation and gaming industry in India has immense scope to grow. Given the financial meltdown, many western countries are actively looking at destinations like India to develop animation content within moderate budgets. The increased interest of Bollywood and the regional cinema industry for animation, has boosted growth also. The Indian animation industry has moved from a pure offshore model to co-production model. While the domestic sector contributed with manpower and infrastructure, international producers helped with marketing and distribution." Ms Gupta said that according to Nasscom therefore, animation and gaming companies will witness a significant growth by 2012. "At present, there are some 250 animation companies in the country. By 2012, we expect the number of such companies to swell to around 400. The number of gaming companies will also double from around 50 now to 100 by 2012." The Nasscom vice-president estimated that the turnover in the animation sector could cross $1 billion by 2012 from $492 million in 2008. Similarly, turnover in the gaming industry stood at $167 million in 2008, but is likely to go up to $830 million by 2012. Ms Gupta said Nasscom was keen to provide quality training to those, who want to pursue a career in animation. It has already approached the IT ministry for setting up a formal accreditation board for the animation industry. "The board will come up with a curriculum, which will be taught by all animation training institutes. We feel that there is an immediate need to standardise the courses that existing institutes offer," the Nasscom vice-president said.
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