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India: The Power of One Billion

India: The Power of One Billion

Tue 03 Jun 2014 12:23pm GMT / 8:23am EDT / 5:23am PDT
Emerging MarketsMobile

The world's fastest growing mobile market remains relatively untapped - but tread lightly, there still be dragons

India is the birthplace of four world religions, the numerical system, cricket cheerleaders, and some damn fine food.

Within this one landmass, we also speak over 1,600 languages and play host to an ever-shifting menagerie of varying sub-cultures, tastes, and religious sensitivities. 

But the uniting factors are compelling and increasingly exciting for our industry: over 940 million mobile users at last count (with 200,000 more connecting every day) and 4G coverage rapidly expanding. India is a mobile-first market, and it's this mobility that is connecting the nation at an exponential rate.

Add in a recently elected, mobile savvy, foreign investment-friendly Prime Minister - Narendra Modi - and the stars have aligned to create a massive untapped new market for developers. 

Perhaps most importantly, we love entertainment, and we especially love games. From chess to Diwali cards, play has been deeply woven into the DNA of the Indian diaspora for millennia. 

With that in mind, here are a few starters-for-10 for any developers looking to delve deeper into this giant minestrone of bubbling and untapped potential.

The Good News!

1. Scale and Growth

The raw numbers are staggering: India is already the world's second biggest mobile market and 200,000 new users are added daily - a trend that's actually accelerating. But how accessible and valuable are these users in real terms?

The reality is that up until recently, mobile user growth was both focused in the six major Tier 1 metropolitan cities. Secondary growth was driven by fragmented and hard-to-reach rural pockets with carrier-owned ecosystems and local incentives. However, all that is changing, and fast.

1

McKinsey predicts by 2020 India will have more 4M+ cities than all of Europe combined

Mobile penetration in dozens of Tier 2 ( population of around 3M+, or the size of Los Angeles) and Tier 3 (1M+, or around the size of Liverpool) cities is now growing faster than the six major urban centres, and Tiers 4 and 5 aren't far behind. These previously fragmented markets have exciting new potential driven primarily by technological and cultural consolidation that are inherent with mobile connectivity.

2. Technical infrastructure

The "last mile" infrastructure bottleneck has been an issue for over a decade. The up side is that wireless connectivity has already become the de facto standard with the previous 3G spectrums and recently launched 4G standards growing fast. That's good news for users of mobile devices, and for content creators looking to reach mobile-native users anywhere and any time.

2

KPMG estimates 80 per cent of all India internet connections are already wireless with smartphones being the key driver

Much like other emerging mobile markets, India is also primarily Android driven, with Android devices accounting for 98% of the smartphone market. iOS accounts for less than 2 per cent, largely because Apple only started operations recently (with a major advertising blitz across the nation) - but also due to the proliferation of high quality, locally manufactured, and much cheaper devices from OEMs such as Micromax (in a campaign fronted by Hugh Jackman doing his best not to look awkward while saying "it's nothing like anything," bless him).

3. Cheaper User Acquisition

A common problem the more established mobile markets have is content saturation and discovery, leading to cost-per-install estimates of $2.73 (SuperData), with an average ARPU of just $1.96. That ratio gets significantly worse during holiday release windows.

CPI estimates for India are significantly lower - for now - at around $0.45 for your average Android user (MediaNama.com). With less content saturation also comes more opportunity for organic virality, with 2,000 to 3,000 downloads needed on a given launch day to enter the Play store top ten (and one tenth that for paid games). From there, the natural force multipliers we know and love start to kick in.

With our partners the biggest successes have come from building up relationships with a network of key tech influencers such as NDTV (like CNN in India) Cell Guru, Honey Singh (best name ever), and local OEMs such as Micromax, who can be more open to pre-loading your game on new device launches.

The Bad News...

Mobile payments remain an issue for monetisation - that is at least, if you plan on using the same monetisation toolbox we've been used to in the West.

Credit card penetration is still comparatively low, and while universal carrier billing does enable frictionless payment opportunities, up until recently the revenue split has been frankly prohibitive (90/10 - to the carrier).

3

Like China, India has a vibrant ecosystem of cheaper, more functional OEM device makers that own a large chunk of the market

On the plus side, in-app mobile advertising is generally accepted - even appreciated - and there are other avenues for distribution and monetisation popping up increasingly. Some carriers (with Vodafone India leading the way) have even created special direct-to-consumer carrier billing programs with a more equitable 60-40 revenue share, though many would argue this is still not close to far enough.

A Final Word

As we head into E3 week, developers continue to ask the question of where growth will come from in our industry - not just where, but how to tap into it, and how to get there efficiently and with a game's creative integrity intact.

While big budgets and F2P model variants continue to drive value for the big publishers and studios like Gungho and Supercell, there's another option: one half way around the world, but a lot closer than you think. Consider India as ready for prime time. 

Justin Shriram Keeling is a 14-year industry veteran having launched and sold gaming businesses in London, Tokyo, Los Angeles and India. He consults with developers on new market strategies with a focus on India and Japan at Lumikai, and recently launched into beta a proprietary India-based distribution, loyalty and monetisation platform at www.playsona.in.

6 Comments

Steve Wetz Reviewer/Assistant Editor, Gamer's Glance

213 529 2.5
In my personal observations while in India, yes there are a lot of cell phones, even the really low income Indians seem to have at least one. But the vast majority of these devices are 5-10 years behind what we're working with in America and Europe - a lot of dual-SIM, functional phones with low-res screens.

That's not necessarily a bad thing from the content creation side. There is something to be said for the business opportunity in re-releasing smartphone content from the last generation and letting India catch up at their own pace. However, like the recent article on localization in Japan, I think localization in India would be problematic. You can't just localize into Hindi and call it a day - Tamil is also widely spoken (and that's not all from the language standpoint). Social standards and taboos are likewise different. Culture is rich and diverse in India and absolutely part of their every day life. Localization must also take this into mind.

Still, the door is wide open for a company with a good catalog of content which could work on their devices.

Posted:5 months ago

#1

Stu Johnson Technical Lead

15 39 2.6
Expanding on that, they are very communications savvy in India, and from my own experience it does seem everyone has a mobile regardless of income or cast. For many this represents several months income. But they are used almost exclusively as a tool to earn money. rickshaw drivers, general gophers, cha sellers etc. all use the mobile to keep one step ahead of the competition, build up client bases, be on 24/7 call-out etc.
They often have no time for playing games or downloading apps...

There was a very good article on this a few weeks ago, but for the life of me I cannot remember where to find the link :(.

As regards localisation, Steve is right, but this should be no more difficult than currently supporting a single Asian SKU with Traditional Chinese, Modern Chinese, Korean and Japanese.

Posted:5 months ago

#2

Justin Keeling Founder & CEO, Lumikai Ltd.

5 6 1.2
This is true -- the majority are still feature phones, though 30% smartphone penetration out of a 900M+ user base is still a lot of users! (And due to double in the next couple of years).

I see this more as an opportunity though than a problem -- you have a comparatively untapped blue ocean of hundreds of millions of mobile-first users who are getting started with what we may consider to be catalogue games in the West, where as more mature mobile markets are highly saturated and competitive to the point where for many developers it's just not a viable market anymore.

There's also a big difference between auto-rickshaw style usage and what we're seeing from from the young middle class in urban centres who are hungry for new kinds of entertainment: not just games but streaming video, media etc.

Posted:5 months ago

#3

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

469 178 0.4
Justin, you forget that one smartphone is not any smartphone, especially seeing as smartphones have come a long way since inception and become quite bloated compared to their historic counterparts. Many earlier phones like the Orange San Francisco, HTC Dream, LG GT540, hell most of the first and second generations have under 1GB of storage, and many chinaphones still do. Problem is back then Facebook was a 4MB app and nowadays the very same thing is a whopping 70MB. With that kind of app inflation, devs have to be very mindful that the majority of India is probably still on phones of this generation or spec.

Posted:5 months ago

#4

Justin Keeling Founder & CEO, Lumikai Ltd.

5 6 1.2
Andrew: perhaps in times past, but we see very few even baseline smartphones being sold with under 4GB of storage these days. Here's a list of the top selling Micromax (the leading local OEM manufacturer) phones last week: (http://www.91mobiles.com/top-10-micromax-mobiles-in-india). You'll note that amongst the feature specs none are less than 4GB and many are well above that.

Having said that your overall point stands; games with bloated file sizes will have more limited appeal (wireless data speeds being a bigger issue than storage) -- just as they did in the early years of the smart phone booms in other nations. But the rate at which that market is catching up fast and growing exponentially can't be ignored as an opportunity.

Right now I'd agree it's an opportunity for developers with high quality catalogue games to access a new market, though I'd personally argue that game quality has little to do with filling Gbs of data and more about design, as plenty of even the latest top selling mobile games on Western app stores illustrate.

Posted:5 months ago

#5

Shruti Verma Lead- Gaming Forum, NASSCOM

1 0 0.0
Hi Justin, Its a good article talking about the potential of the Indian Game Industry. I represent NASSCOM, India’s premier trade body and chamber of commerce for the IT industry, and the NASSCOM Gaming Forum was set up eight years ago to provide a common platform to share best practices and knowledge to developers and businesses within the Indian gaming industry, especially the burgeoning indie game dev community.

The NASSCOM Gaming Forum’s advisory council, chaired by Dhruva Interactive Rajesh Rao, comprises of representatives from India’s top gaming companies, including Disney Indiagames, Lakshya Digital, Yellow Monkey Studios, Glu India, Ubisoft India and Reliance Games. The Forum has active support and participation from Digital Chocolate, Electronic Arts, ChaYoWo games, 99 Games and many more.

The Gaming Forum has six active city chapters – Mumbai, Delhi, Hyderabad, Ahmedabad, Pune and Bangalore - each of which regularly hosts developer meet-ups. It also organizes the annual NASSCOM Game Developers Conference which is the premier industry event in India.

So far we have tracked 200 Indian Game Dev studios releasing a min of 50 + games in a year as a whole. the potential is huge and the need for local + global content. The best part 80 % and more are mobile game developers.

Posted:4 months ago

#6

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