Gaming industry looks at licensing to monetise

While digital gaming was pioneered by Mario in late 90s in India, changes have been occurring rapidly and dramatically in digital ecosystem since 2014 with technology companies increasing their focus on mobile with each passing day, thus making mobile gam
Gaming industry

Growing by leaps and bounds, the Indian mobile market has not only helped eCommerce beef up, but other domains are also benefitting from it, mobile gaming being one of them. With genesis in late 90s, when companies like Dhruva Interactive and Indiagames started developing and publishing games, at the moment India has more than 250 gaming companies, mostly start-ups aiming to develop the next Candy Crush or Angry Birds. While there is no dearth of games oriented at X-box, PSP, PS2 etc. mobile gaming is what has been the flag bearer, given the increasing smartphone market in India. 

Gaming is all set  become a Rs 4,580-crore sector by 2019, with mobile gaming leading the growth, says a FICCI-KPMG Indian Media and Entertainment Industry report for 2015. The mobile gaming market in India grew from Rs 820 crore in 2013 to Rs 1,070 crore in 2014 and is further projected to grow at a compounded annual 20 per cent to reach Rs 2,620 crore by 2019. The increase in the usage of smartphones and tablets is expected to encourage more users to access games on mobile web and app platforms.

Why is brand licensing crucial for gaming industry?

While gaming developers are dime-a-dozen in digital landscape of India, the competition is not going to be easy. When developing and publishing a game on digital platform, entry barriers are low, which has resulted in a significant growth of 138 per cent in the Indian gaming segment between 2013 and 2014. However, gates to platform have literally come down crashing and a flock of developers has flooded in, only to find that once they are inside, there is endless shelf space with new games launching every now and then, this makes a not-so-good-news leading to crunch of visibility in the arcade.

So, it’s no secret that getting a game noticed and downloaded (user acquisition) is the biggest challenge confronting any developer publishing their games on digital platforms these days, which is against this backdrop that developers embark on creating and publishing their digital game. The majority of developers still rely on a game publishing strategy that centers on “build it and they will come.”

This is where brand licensing has a crucial role to play. Acquiring the rights of a brand and leveraging the consumer awareness for that brand is a great strategy that has been used by developers for consumer acquisition.

"Since the brand/ fictional characters are already popular with the users, the discoverability of the game becomes easy. Consequently, the game downloads go up," asserted Ashish Gupta, Country Manager - India, Sri Lanka & Bangladesh, Gameloft.

“An IP which is hugely mass with great fan following at the bottom of the pyramid will help Nazara meet its target of reaching out to 100 million monthly active users on its product offerings,” said Manish Agarwal, CEO of Nazara technologies that has been developing mobiles games for Chhota Bheem.

In words of Anila Andrade, AVP – Operations at 99Games, “If you look at gaming itself as a market, it is very over-saturated at this moment. There are players all over, discoverability is a problem and how would any consumer pick up your game out of that lot is not easy at all. There are companies who have hoards of marketing budget to promote their game and move up the chart and even if your game has quality content, it fails to stand in competition. Consumers may not really notice your game in such a case.”

The economics of developing game on a licensed content can be more cost effective than consumer acquisition by spending a bomb on marketing. “A good brand will have a ready market of consumers who already know the brand and the licensor can market to this audience for your game,” asserted Chitra Johri, VP of Bradford License India.

The fillip to licensing in Indian gaming industry        

Citing brand licensing as an effective retail strategy, Andrade adds, “Creating a game out of a licensed brand, for instance Dhoom in our case, solves the problem of discoverability. The consumers are familiar with the franchise, given the movies released in past. The brand name gives credibility and visibility to the game which in turn drives the number of downloads.”

The strengths of this genre in licensing lie in cross-platform, mainly iOS and android based games, increasing exposure to internet and zero dependence on channels  like theatricals or TV properties. Once the popularity spreads and fans get hands on, the addiction traverse to buying licensed merchandise including stationary, accessories, collectibles etc. while apparel being the hot-selling products.

"In majority of the cases, licensed games perform better than the non-licensed games, since the characters are already popular with the users. For instance: Our licensed games like Despicable Me: Minion Rush, Spiderman Unlimited, UNO & Friends are some of our popular games with high number of downloads," added Gupta of Gameloft. 

Further, the popularity spreading fast at digital platform also adds to the value of IP. There is a dedicated digital audience at hand, who the property owners can communicate with in no time, about new products, promotions and also gain marketing insights from directly.

What’s in trend in India?

While celebrity licensing dominates there in west following by TV properties, Indian scenario is quite different with Bollywood movies ruling the rooster. Of late, Salman Khan starrer movie ‘Sultan’ has been licensed out by Yash raj Films to Udupi based mobile game developer 99Games.

Further, a plethora of players have been developing games around Bollywood movies such as Bajarangi Bhaijaan movie game that was downloaded 1 million times, Happy New Year: The Game (downloaded 1 million times).

Abhinav Chokhavatia, Founder & CEO, Zatun says, “Normally what happens is that when a lot of movies come out, games also come in market around those movies, which help promote the movie as well. But most of the times, games are released just an addition and not much thought is given into it. While in west, when a movie is released – for instance ‘Lord of the rings’, the game is given equal treatment as the movie is. So, the licensing deal for gaming takes place almost at the time when movie production begins.”

Addressing the bottlenecks

While exclusivity is the advantage in mobile gaming, shorter shelf life is a concern. As Andrade says, “One month before the release of movie to a month after the release is the maximum life span of a movie based game. However, the cross promotions happening endure that the game gets enough visibility. Moreover sops like a chance to meet movie cast act as factors to drive success.”

Also low cost handsets also act as impediment to the industry as a majority of population owns smartphones between price range of Rs 5,000 to Rs 15,000 that do not support games with high-end graphics due to crunch of space. Hence the developers have to restrict themselves to develop games worth 5 or 8MB.

“For global games, our size is 500-600 megabytes; in India, it is five Mb. We want to focus on games that are in 30-40 Mb,” says Amit Khanduja, chief executive, Reliance Games. Despite a big market, the quality of games has been low, due to low-cost handsets and slow data.

Future ahead

With rising smartphone and tablet penetration, the mobile gaming industry in India is expected to touch Rs 2,620 crore by 2019, with a year-on-year growth of 20 per cent, according to a recent report by FICCI-KPMG. “Smartphone penetration in India assures that mobile gaming will be huge, with major growth drivers being the Tier 2 and Tier 3 cities,” said Arpita Kapoor, co-founder, Mech Mocha.

However, the sector must do its bit to stay on top as it requires constant innovations and additions to not just grow the market share, but to keep the fans engaged, it needs marketing innovations to stay top of mind in the ever-changing digital world and from a licensing perspective needs a strong programme and strategy.

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