India now a serious market for game console makers

Slashdot It! India's nascent $30 million game market is set to grow to $700 million in the next five years, driven by global companies that are pushing new-generation consoles in the Indian market, industry watchers said. Microsoft launched its Xbox 360 in India in September 2006, the premium version retailing at 24,000 rupees ($593), without taxes. In April this year, Sony launched its PlayStation 3, priced at a hefty 39,990 rupees ($988), complete with the latest Blu-ray Disc-formatted optical drive. The third major console of the year, Nintendo's Wii, has not been officially launched in India but is sold through various channels at a substantial discount to the Xbox and the PS3. "The main drivers for the growth of the gaming industry in India would be seeding initiatives by the players, marketing, and pricing of the games, which is an important aspect in India," said Rajesh Jain, executive director at KPMG. He said India's game market would expand to $650 million to $700 million in four to five years from $30 million at present, including the gray market. Microsoft, with its first-mover advantage, is meeting the challenge head-on. "The response to the Xbox has been phenomenal...absolute demand has exceeded our expectations and plans," said Microsoft India's Mohit Anand, Microsoft's country manager for entertainment and devices. "I have more than 1,000 retail touch points across the top seven cities," he said. "We are everywhere...any retail outlet." While in the past, consoles were left to sell themselves, makers are now taking a proactive approach to sell their products. "This kind of an organized marketing thrust was missing when the first Xbox was launched," said Anand Gurnani, editor of game portal Animationexpress.com. People's perception of games has also changed. "It has gone from being a product for a cult group to a lifestyle product." Tanisha Kaul, product head of PlayStation at Sony India, said a study done prior to launch showed that increases in jobs, disposable income and Internet usage were inclining more people toward a digital lifestyle and alternate means of entertainment. "Indian consumers might catch everyone unaware by bridging the gaming gap with the developed markets more quickly than anyone could have imagined," she said. Price points are very important in India. Most games are priced steeply. In the United States, new games for the 360 retail at around $50 a DVD. In India, imported games attract a steep duty and retail at upward of 3,000 rupees ($74). Prices of games are being reduced as there are more homegrown games available. "Some of the PlayStation 2 games have already been brought down. That helps to grow the market," Jain said. "At the end of the day, the prices at which the games are bought is important." He pointed out that software developed in India leverages local strengths, bringing down costs and the selling price. So Microsoft has introduced a cricket-playing game in India priced at 1,699 rupees ($42). In fact, the company has absorbed 54 percent of the import duty on the Xbox. "It is not the cost of the box which is important...it is the cost of the recurring games," Jain said. "What is needed is localized content and games designed for the Indian market," said Tony Garcia, CEO of FXLabs. Surf the web faster with Mozilla FireFox