(4 April 2007 4:25 pm)

MUMBAI: The online gaming industry in India is worth Rs 210 million, according to a report published by IMRB International on behalf of the Internet and Mobile Association of India, (IAMAI). The key drivers of this segment in India, as also in developed markets include youth in the age group 17 - 25 years.

Revenues in this segmentcome from organized cyber cafés, subscription revenues & advertising.

Although the online gaming market in small in comparison to developed gaming markets as Korea, China, Japan and the US, currently most of the revenues in this segment come from organized cyber cafés (Rs 121.7 million) and from subscription based revenues (Rs 66 million) and the contribution of advertising (Rs 22.4 million) which is expected to go up over the next 2-3 years, in line with developed gaming markets such as US where it accounts for close to 40 per cent.

20 per cent of this revenue i.e Rs 40 million accrues directly to International playersnot based in India.

Almost 20 per cent of this revenue (Rs 40 million) currently accrues directly to International players not based in India. It is expected that over the next 2-3 years this proportion would go down as more Indian gaming portals come up and establish their presence by providing localized content.

The study reveals that at this point in time, most Indian gaming portals are evaluating various alternative strategies for long term monetization. Currently most are on a free model and are looking at advertising revenues to sustain the first phase of growth. There are plans to introduce monthly subscriptions or subscriptions to higher levels as users become more comfortable. Most portals acknowledge that advance advertising options such as in-game placements will take some time to enter the lexicon of mainstream advertisers, most of who are just beginning to experiment with online advertising.

He added, "online gaming is one of the major drivers of internet adoption and use, and it is necessary that this segment is given all the necessary encouragement that it deserves."

According to Ray, there are three broad issues that could act as impediments to the progress of this segment:

a) the negative perception of gaming, especially online gaming among parents
b) the poor enabling infrastructure, including connectivity and hardware constraints
c) recognition of the importance of this segment in increasing the penetration of internet by the government. It would be a great advantage to the gaming community in India, for example, if online gaming was to be declared "e-Sports" and all the advantages that accrue to sports currently are extended to online gaming as well.