Industry
Animation and Gaming Industry Overview (Source: NASSCOM - 2007)
Global Market
The global animation market is estimated at USD 59 billion in 2006. this market is expected to grow at a CAGR of nearly 8 percent over 2006 - 2010, to reach USD 80 billion by 2010. within Animation, the entertainment segment will continue to remain the major contributor, accounting for nearly three-fourth of the total market through the forecast period.
The worldwide gaming market stood at USD 21 billion in 2006. This market is estimated to reach USD 42 billion by 2010, growing at a CAGR of nearly 18 percent over 2006 – 2010. In gaming market, mobile and online gaming segments are expected to grow significantly at CAGR of 30 and 25 percent respectively, through 2010.
The US and Europe remain the biggest markets for outsourcing animation and gaming related activities. Majority of the work from these markets is being outsourced to destinations in the Asia Pacific region and in East Europe.
Indian Market
The Indian Animation industry revenues were estimated at USD 354 million in 2006, a growth of 24 percent over 2005. The industry is forecast to reach USD 869 million by 2010, representing a CAGR of 25 percent over 2006-2010. The entertainment segment contributes nearly 68 percent of the total animation market in India. Key factors driving this growth include
- Significant cost advantage
- Large pool of English speaking manpower
- Growing maturity of Animation studios
- Development of IP
- Attractive domestic market opportunity
Currently there are about 300 animation companies, employing approximately 12,000 people in India. Further, industry estimates indicate that nearly 3,000 freelancers also work in the industry. Exports are estimated to have accounted for more than seventy percent of the revenues in 2006. The industry’s dependence on exports is also reflected in a major proportion of the work force being involved in the outsourcing segment. However, looking forward, the share of the domestic market is expected to grow. Indian companies have started focusing on the domestic market and domestic demand for animated content has witnessed an upward trend over the past few years. Further, producers of several Bollywood movies, such as Krish, Dhoom 2 etc., have started using special effects in their production. Additionally the success achieved by Hanuman, a fully animated movie has helped provide an impetus to increasing levels of interest in animated movies in the domestic market.
The Indian gaming industry is estimated at nearly USD 48 million in 2006. The industry is expected to cross USD 424 million by 2010, representing a CAGR of 72 percent over 2006-2010. Currently, the mobile and console gaming together contribute nearly 77 percent of the total gaming market in India. The increasing mobile and broadband penetration along with the introduction of new generation consoles is expected to lead to the shares of online and console gaming in the total Indian gaming market increasing significantly by 2010.
Even at these impressive growth forecasts the Indian Animation and Gaming industry will account for less than 2 percent of the worldwide market in 2010, clearly indicating a significantly larger opportunity.
Ensuring the availability of adequate, suitable manpower and a focused industry development program can help India achieve a larger share of the pie.