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Stepping Up the Game: Technology drives growth in the mobile gaming market

January 10, 2017
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The telecom industry is witnessing a surge in the consumption of content-based services. Among these, mobile gaming has emerged as the most popular, with the segment registering high uptake by users. According to the Indian Media and Entertainment Industry report by FICCI and KPMG, the Indian mobile gaming market is expected to register a compound annual growth rate (CAGR) of 20 per cent between 2014 and 2019. This growth will largely be on account of the growing smartphone penetration and broadband access in the country.

Given the huge growth potential, the mobile gaming market has attracted significant interest from Indian as well as international game developers, who have launched mobile games across different genres, ranging from puzzles to arcade and racing.

Growth drivers

The growth in the Indian mobile gaming market can be attributed to several factors. The key amongst these is the proliferation of smartphones, which has given users on-the-go access to gaming content. In recent years, the Indian smartphone market has been flooded with affordable home-grown and Chinese handsets offering compelling features at low prices. Most of these smartphones are powered by processors, which give a similar gaming experience as their high-end global counterparts.

The surge in data uptake has also fuelled the growth in the mobile gaming market. Operators across the country are on a 4G expansion drive and have come up with lucrative tariff offers to bring more users on board. This, in turn, is helping customers get a high speed gaming experience at affordable rates. Moreover, the spread of Wi-Fi services has led to increased usage of live online games.

Mobile games often come with certain in-application purchases, which enable users to move up to higher levels in the game. The increased adoption of mobile wallets has facilitated in-application purchases by gamers. Also, the changing demographics of mobile users has given a big push to the uptake of mobile games. Around two-thirds of the population is below 35 years of age and is considered to be more tech-literate and thus more inclined towards gaming as compared to the older population.

Key players and strategies

The mobile gaming market in India is highly competitive owing to the presence of several big and small companies. While traditionally, global players such as Nintendo, Sony, EA Sports, Apple, Ubisoft and Disney Entertainment have dominated the Indian gaming market (seven among the top 10 games in the Indian market have belonged to international developers), of late, several home-bred companies have entered this space. These include Reliance Games, one of the biggest gaming companies in the country, Games2win, Bash Gaming, 99Games, JumpStart, Csharks Games, Square Enix, Zeptolab, Thumbstar, Tresensa and Bulkypix.

These companies have resorted to a range of strategies to attract customers and enhance their user base. The majority of the companies have adopted the free-to-play model for offering mobile games. Under this model, consumers can download an application for free, but have to pay later either via in-application purchases or in-application advertising. This also helps in attracting casual gamers.

Further, since the majority of smartphones today run on Android, gaming companies have ensured that most of their offerings are compatible with this operating system. This helps developers reach out better to a higher user base. Also, developers are now focusing on delivering niche content to a specific target audience. To this end, they are developing new and creative games that are a particular age group, gender and/or group of people.

Operator offerings

Over time, telecom operators too have become involved in the gaming market in a bid to earn additional revenue. While some operators have developed exclusive applications that offer games to their customers, others have incorporated games as a part of their content-based offerings. Airtel offers the Wynk Games application that allows users to access around 2,000 local and global games across genres such as cricket, sports, racing, adventure, cards and puzzles. The platform hosts games from about 150 game developers. Customers can play these games without having to pay any in-game charges. The games are advertisement-free and are updated regularly. Moreover, the operator enables the user to download unlimited games depending on the plan opted for. The user can also download these games and play them offline at any time.

Reliance Communications (RCOM) has recently launched a new digital store for games called Reliance Games Arcade. The store offers a collection of more than 300 premium games from international and India-based game developers. RCOM subscribers, both prepaid and post-paid, can access the store at Rs 15 for 10 days. All the games available for download enable in-application purchases and allow users to enjoy an advertisement-free gaming experience. Customers can download any game free of charge from the store and can make payments for their in-application purchases using their mobile balance or through additions to their post-paid bill. Non-smartphone users can also download these games by going to the Games Arcade website.

Meanwhile, Vodafone India had in the past partnered with Disney India’s interactive business to launch the Vodafone games and apps portal to offer premium games applications for both feature and smartphones. Under the partnership, Vodafone offered free games at premium plans. In addition, Vodafone offered the try-and-buy feature, which allowed users to download and use a game for free for two tries and thereafter buy the game only if they liked it.

Issues and challenges

Despite the high growth potential, market players face several issues and challenges. For one, gamers in India are highly averse to paying for mobile games. According to industry reports, only 18 per cent of the total 131.7 million mobile gamers in India as of early 2016 paid for gaming content. In comparison, in Russia, 27.1 per cent of mobile gamers subscribed to paid content, in Brazil 35.4 per cent did so and in China, 30.2 per cent paid for content. Further, the ARPU of mobile gamers in India is reportedly around $0.78, which is far below the global average and the lowest in the BRICS market.

Secondly, most users prefer to not download heavy games (above 25 MB) despite the low-cost data plans and inexpensive game rates. Instead, they prefer to utilise their data for other purposes such as web surfing, social networking and video chatting.

Another major challenge faced by mobile game developers is the ever-increasing competition in the market. This means that developers need to put in extra effort to get their game noticed on the store. This, in turn, calls for significant investment in marketing initiatives and activities. Meanwhile, with upgrades and new versions of operating systems being introduced frequently, mobile gaming companies also need to invest more time and effort in keeping up with the technology shifts in the market.

Conclusion

The challenges notwithstanding, the mobile gaming industry is set to witness exciting times ahead. With a quantum increase in data and smartphone usage, companies in this space are looking to step up their game to keep users interested and, well, hooked.

 
 
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