Though it’s a $6 billion industry in the US alone, most Indian software companies are staying away from the fun. Srikanth R P highlights the few who are enjoying themselves

Name a segment of the IT industry, which is worth billions of dollars, but is not yet seriously tapped by Indian companies? If you thought we were talking about BPO you are in for a surprise: the segment is game development, and the Indian companies in this space can be counted on your fingers.

While Indian enterprises are present in almost every conceivable space where there is a scope for developing IT applications, it is in the game development arena that big names from the Indian subcontinent are missing. This is surprising, since Indian entities are trying to outdo each other to gain marketshare in the low-end IT services and the current hot favourite—the BPO space.

K Rajesh Rao says there is great potential for Indian game developers who can demonstrate world-class quality and game development experience

The market
While Indian software developers continue to play the waiting game, the market for game development is booming. Consider this: in 2001, American computer and video game sales in terms of revenue were estimated to be $6.35 billion. The players in this segment are global icons. In the interactive gaming industry, Sony’s Playstation has half the market share, closely followed by Nintendo. The toddler in this space is the world’s biggest software company, Microsoft, which has only recently made an entry with its Xbox.

The reason why this should interest Indian software developers is simple. As competition builds-up, the three major companies in this space are looking at third party developers to create games for their consoles. And here is where the opportunity lies for Indian developers.

Potential
The games industry consists of two major sectors—video games and computer games. While the computer games market has been dominated by a single standard, i.e. the PC, the video games market has been dominated by proprietary standards: Sony’s PlayStation 2, Nintendo’s Game Cube and Microsoft’s Xbox. The few Indian players in this space are concentrating on both segments. These include Dhruva Interactive, Paradox Studios, Indiagames and Escosoft. Though the segment does not boast of a Infosys or a Wipro, the potential is undoubtedly huge. Says K Rajesh Rao, chief executive officer of Dhruva, “Globally, the games industry is under increasing pressure to reduce development time and cost of production. A typical big budget game title today takes around 24 months to make, and will have a production budget of $4-10 million. Because of the time involved, major publishers and studios are looking at outsourcing development, provided quality and reliability considerations are fulfilled by the development partner. There is great potential for Indian game developers who can do this and demonstrate world-class quality and game development experience.”

Just like the software space, Indian game developers are starting out by doing small pieces of work and moving on to a higher level like developing their own game engines. For instance, small game development companies have made their entry in this space by coding, creating art assets and game levels and developing tools for porting games from one platform to another. If Indian players build enough expertise and knowledge they could play a bigger role in the development of original games. Says Anurag Khurana, chief executive officer of Paradox, “The potential for Indian game developers is enormous as there are excellent programmers in India and the market is growing at a fast pace, especially the wireless domain. We have the capability to tap this market due to the large number and variety of wireless devices owned by people all over the world. What Indian developers need is an entrepreneurial environment and support from the VC community. If this is done, we can compete against the best in the world in terms of quality and cost of development.”

Though the number of players in the Indian market is small, it is increasing gradually. Proportionately, the demand for specialised game development tools like 3D Studio Max from vendors like Discreet is also on the upswing. Says Pankaj Kedia, the company’s regional director for south Asia, “In the year 2000, we did not have a single game development player on our list. Today, we have eight customers and the numbers are increasing. The trend is obviously positive, and we can see a lot of Indian players bagging contracts for game development.”
Additionally, innovations in the field of game development, like Discreet’s gmax, have also boosted revenues for the company in India. Most people get bored after playing the same game at the same levels after a point of time. This is where gmax allows game developers to extend the life of a game title by licensing gmax development code, which helps in creating and distributing gmax game packs. What this means to users is that they can customise the content as per their liking and thereby increase the shelf life of the game.

According to Anurag Khurana Indian developers need an entrepreneurial environment and support from the VC community to enable them to compete against the best in terms of quality and cost of development

Player strategies
Even though the game development industry in India is small, it is interesting to note the efforts made by companies trying to make a mark. One of the earliest players was Dhruva, established in 1997. The company has two divisions, one for 3D games and the other for mobile games. The former division develops games for gaming consoles and for the PC, while the latter develops games for mobile devices. While this looks like an effort similar to any other game development company, the reason Dhruva’s case is laudable is due to the efficient use of the limited resources at its disposal, and its constant climb up the value chain. For instance, during 1997-98, the company mainly invested in R&D, which included building its own 3D engine technology and developing core competencies in various disciplines like Art, Technology and Design. The company also spent a lot of time and effort in understanding business dynamics and building contacts and relationships with international players in publishing and development. The R&D phase culminated in the company’s first game demo, which was displayed to many key international players. At the Infogrames headquarters, the company ran the demo for Eric Mottet, one of the co-founders of Infogrames, who was then the head of worldwide development. He was impressed with the demo, and Dhruva’s initiative of trying to create a world-class game development studio in India. Subsequent discussions with Infogrames resulted in Dhruva being signed on for developing the PC version of Mission:Impossible, a title which had earlier proved hugely successful for Infogrames on the Nintendo 64 platform. Dhruva, thus became the first Indian game developer to be hired by a major international publisher to develop a game title, signalling its entry on the international stage.

Over the last three years, the company has built a strong reputation in the global game development community and is highly respected for its capabilities. This can be seen from the game titles that Dhruva has worked on. Says Rao, “This year, two of the games that Dhruva worked on were released in international markets. These are Geoff Grammond’s Grand Prix 4 (PC) published by Infogrames, and TOCA Pro Race Driver (PS2) published by Codemasters.

Both games are highly successful. We are currently working on four big titles. Two of these games are racing games (one for Xbox, the other for the PS2/Xbox), one is an action game based on a very popular Hollywood franchise (PS2, Xbox, PC), and one is a simulation game for the PC.” Another feather was added to Dhruva’s cap when Mottet’s investment company made an equity investment in it.

The other important player in the Indian game development space is Delhi-based Escosoft. While software makers are talking about developing games for international game majors, this company is looking at building its own game engine (the software on which games are developed). Currently, game development companies are required to pay huge royalties to game engine companies. By developing India’s own game engine, Escosoft can offer game developers a much more cost-effective option.

Players like Paradox are also rapidly making their mark in game development. Though the company is involved in the development of games for various platforms, Paradox’s core expertise lies in multi-player gaming. The company has also built a large game portfolio with more than 100 games developed. Besides, Paradox is also actively looking at the wireless segment, which is believed to be the next big segment in the game development space after video games. Says Khurana, “Indian companies can make a mark in the wireless domain since the market is vast, and the cost of development and time required for the same is considerably less compared to other domains. Since wireless device specifications are changing at a very rapid pace, the possibilities of making games for the same keep on changing. Indian companies can provide these games at a lower cost without compromising on quality. Also, since there is a large pool of qualified developers, it is possible for us to make a mark in this space quickly.” Paradox is also working on developing a action-based 3D game title called BattleDust: The Championship.

One player whose strategies look strikingly similar to those of other Indian software product companies is Mumbai-based Indiagames. Says Vishal Gondal, its chief executive officer, “We have two revenue models: services and products. Though we derive around 80 percent of our revenues from developing and licensing our products, we realised that if products are the jam of our business, then services are our bread and butter. We have tried to implement a combination of both, so that while products allow us to innovate, services provide us the required stability.” On the products side, the company has created India’s first 3D game, Yoddha. On the services side, the company’s focus is on three main segments, advergames, console gaming and wireless gaming. Advergames refers to a segment where companies look at enhancing their brand image by employing games to hook the user to a particular brand. These games are not restricted to the Net and can be deployed offline, on media like kiosks.

In addition, there are players like Milestone Interactive Software developing games for the international market on the PS2, PC and Xbox platform.

Pankaj Kedia says there is a positive trend in game development and the number of Indian players bagging contracts is on the rise

Key challenges
While the market is huge, beyond the few companies we have spoken about, not many Indian players have made an impact in this space. There are a host of reasons for this. Jayant Sharma, chairman and chief executive officer of Milestone sums it up nicely when he says, “Game development is very complex, and requires specialised skill-sets that are not easily available. A good game can only be created by the right combination of design, programming and creative effort. Building such a team that already has the required skills is not easy. Game development is also highly expensive if games are developed for the global market. Moreover, electronic games in India are not part of the mainstream culture, unlike other developed markets where at least one generation has grown up playing video games. Thus, the barriers to building successful game development activity in India are cultural, social, and financial.” Adds Khurana, “The reason why a handful of Indian companies are able to make an impact is that Indian companies have traditionally ignored the gaming market due to certain mindsets. Many people still do not acknowledge the fact that there is a large gaming market out there. They are of the view that games is a hobby for brats rather than a means of exercising the brain. Due to this lack of understanding, they haven’t bothered to approach venture funds. The few companies that are operating in this space are always starved for funds to buy new technology to develop better gaming applications. I remember in our start-up days the dilemma all of us were faced with. When someone asked us, ‘What do you do for a living?’ and we answered, ‘We work in a games development company, the next question promptly asked was, ‘That’s ok, but what are you paid for?’”

This is the reality most companies in game development are confronted with as there is no adequate understanding of the market. Additionally, Indian society has not had a significant exposure to gaming, and there is very little game development talent available. Hence the real challenge for a game development company is to first build teams by recruiting the right talent and providing them the required training; only then can it look at building its expertise.

Some Indian companies have now started offering courses on game development. One such company is Arena Multimedia; it has started a course called Arena Gaming Specialist Programme, validated by players like Indiagames and Paradox. Says Sudhir Mathur, head of Arena, “Game development is one area where India can emerge as a strong provider of content or programming resources. In the last year itself around 10 Indian companies have ventured into gaming. Globally, game revenues from interactive TV, mobile phones and the Internet are expected to zoom. Industry estimates suggest that by 2006, 529 million people across the world will play mobile, interactive TV and online games. There was a need for trained manpower in this segment. Looking at the demand, and the absence of an industry course to fulfil this demand, we launched this programme.” Arena has structured the course into three levels. It teaches students concepts of animation, game development, including game content design, game engines-driven development, and finally, Java programming to develop interactive games that can be played on mobile devices.

Considering the lack of demand in the domestic market, almost all players are concentrating their energies on countries like the US and Japan. But some like Dhruva and Paradox are looking at growing the Indian market. Dhruva plans to develop games keeping in mind India’s social and cultural context. As for players who complain about the lack of local demand, Paradox’s Khurana has a ready explanation. “Gamers are gamers, whether Indian or foreign.

The market is huge, it has only to be tapped properly. Don’t expect to sell your PC title for Rs 1,000 or a mobile game at Rs 100 in India. Price it keeping in mind Indian sensitivity to the cost factor and the Indian gamer’s choice in mind, and you can definitely create demand.”

Think about it. Wouldn’t you love to play with characters of the Mahabharat or the Ramayan? It seems the path ahead for Indian game development companies is to constantly move up the value chain and look at building their own game titles. But while a multibillion-dollar market is waiting to be tapped, not many Indian players are queuing up. Is Nasscom listening?

Key stages of game development

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Sudhir Mathur, head of Arena Multimedia, demystifies the jargon and explains the various stages of game development There are five main departments in a game company: Art, Design, Programming, Sound, and Support. Many companies divide each into sub-categories. Art departments, for example, are often divided into 2D art, 3D art, and animation, while the programming team may be split to focus on AI, technology, and gameplay. The art department If you want to follow the path of the artist, you need to first pick a dimension. 2D artists make tiles, textures and skins for 3D models. Depending on the type of game, they can also do painted backdrops, skyboxes and any number of other things. They are also often called upon to do concept sketches for games early in the development cycle. 3D artists make in-world models for 3D games; models can range from humans to vehicles to inanimate objects, depending on the project. Animators bring humanoids, enemies and creatures to life in 3D games. They build models within the polygon limitations of the game engine, and then apply animation techniques. Many animators start out as 3D modellers or 2D artists and are trained on the job to animate with other programmes. The tools of the trade for 2D artists include programmes like Adobe Photoshop (the industry standard), Paint Shop Pro, Painter, and a number of other 2D art programmes. Many 3D artists use 3D Studio Max, Softimage, and Maya to make and animate models. 3D art programmes tend to be very expensive, so self-taught modellers are hard to find. Skills required: Knowledge of both PCs and various art software is highly recommended. Having superb drawing skills are a must, and animators should have detailed knowledge of the human figure and its movement. Game developers generally look for artists first and computer gurus next. The ability to work in groups and work under pressure is essential. As for schooling, courses in computer art, figure drawing, landscapes and general art are useful and many universities offer 3D art classes for computer modelling and animation. Hands-on experience, with a well-stocked portfolio, is also critical. The design department Level and scenario designers create the game world and its architecture inside a 2D or 3D level editor. Most game engines are designed to include their own custom level editors, so design training doesn’t necessarily transfer from one game to another. Editors vary from game to game. Some 3D games use programmes like 3D Studio Max or Lightwave as level editors. Skills required: A general art background is very useful when crafting levels for 3D games, as is some knowledge of architecture and design concepts. General programming knowledge is recommended for the scripting aspect of design. Knowledge of one or more sets of editing tools that have shipped with various PC games over the years is essential. The programming department Programmers are a significant part— some would say the backbone—of every gaming company. Right now the most common game programming language is Visual C++. Programmers write their code in C++ and check it with a code database. Programmers have their hands in every aspect of a game’s development, so they end up using a variety of software packages. Skills required: Besides an extensive knowledge of game programming, mathematics and various languages, another trait is also desirable in programming candidates: the ability to work in a group. The industry is long past the days of the lone-wolf programmer. Working on a section to better the whole project requires disciplines of code modularity, communication and leadership.

Key skill-sets for game development on various media

PC: Shockwave, Flash, Visual Basic, Java, Visual C++, DirectX, Open GL, graphics software like Adobe Photoshop, animation software like Maya, 3D Studio Max, Lightwave, etc. Consoles: The respective software development kit, Visual C++, DirectX, Open GL, graphics software like Adobe Photoshop, animation software like Maya, 3D Studio Max, Lightwave, etc. Pocket PC: Flash, Embedded Visual C++, Embedded Visual Basic, Personal Java, graphics software like Macromedia Fireworks, Freehand, Adobe Photoshop, animation software like Maya, 3D Studio Max, Lightwave, etc. Palm OS: C, C++, Visual C++, Java, graphics software like Macromedia Fireworks, Freehand, Adobe Photoshop, animation software like Maya, 3D Studio Max, Lightwave, etc. Mobile Phones: Visual C++ for native application development, J2ME, VB, WAP, ASP, JSP, graphics software like Macromedia Fireworks, Freehand, Adobe Photoshop, animation software like Maya, 3D Studio Max, Lightwave, etc.

The game development market

Three-in-five (60 percent) Americans aged six or older, or about 145 million people say they routinely play computer or video games. Nearly half of these game players (43 percent) are female. The average age of computer and video game players is 28 years. 61 percent of all game players are aged 18 and over. More than 215 million computer and video games were sold in 1999. Video game sales in 1999 grew to $4.2 billion, an increase of 13.5 percent over 1998. PC game sales increased from $1.8 billion in 1998 to $1.9 billion in 1999. US computer and video game sales (units) in 2001: 225.1 million units (up 4.5 percent in 2000). US computer and video game revenue in 2001: $6.35 billion (up 7.9 percent in 2000. Breakdown of 2001 US sales (units):- Video games: 141.5 million Computer games: 58.8 million Edutainment: 25.1 million Source: Interactive Digital Software Association