Indian Animation and Gaming industry: An insight

The rise of the Animation and Gaming industry in India has been nothing short of meteoric.The segment, driven by significant outsourcing by global customers and a fast growing global market, is offering immense employment potential to India’s Gen Z. At the same time, there is a huge talent shortage within this market, which could impact its future growth. In this issue
of Communique, we look at the Animation and Gaming industry, the business opportunity it throws up and the challenges it faces in terms of requisite, skilled talent.

The global and Indian market: The global animation market was estimated to have touched US$ 59 billion in
2006, with an expected CAGR of around eight per cent over the 2006-2010 period. The market will grow to around US$ 80 billion in 2010. Of this revenue, around 40-50 per cent is attributed to the cost of development, which means that the market for content and related services is estimated at US$ 25-26 billion and forecast to touch
US$ 34 billion by 2010.
A 2007 study by NASSCOM on the Animation and Gaming market has indicated the following:
• The worldwide gaming market stood at US$ 21 billion in 2006 and was expected to grow to US$ 42 billion by 2010 (a CAGR) of 18 per cent over 2006-2010
• The gaming content market (developer’s perspective) touched nearly US$ 7 billion in 2006 and was estimated to cross US$ 13 billion in 2010 (a CAGR of 17 per cent over the 2006-2010 period)
• Within the gaming market, mobile and online gaming were expected to grow the fastest at CAGR of around 30 and 25 per cent respectively
• The US and Europe were the biggest market for outsourcing animation and gaming functions.
• The Indian animation and gaming industry touched US$ 354 million in 2006, a growth of 24 per cent over the previous year
• The sector is expected to touch revenues of US$ 869 million by 2010, at a CAGR of 25 per cent over the 2006-2010 period
• As of now, there are around 300 animation companies in India, employing around 12,000 professionals and 3,000 freelancers
• Despite the existing focus on exports, the animation and gaming companies are now focusing on the high growth domestic market
• The Indian gaming industry touched around US$ 48 million in 2006 and was expected to touch US$ 424 million by 2010. Currently, the mobile and console gaming market account for almost 77 per cent of the total gaming market in India.

The potential: According to the NASSCOM study, despite its ever-growing size, the Indian animation and gaming
industry will account for less than two per cent of the worldwide market in 2010. Clearly, this is just the tip of the ice-berg. The immense untapped opportunity that lies beneath, needs to be addressed by Indian vendors.
The challenge: The NASSCOM study shows that adequate manpower will remain one of the biggest challenges
facing the industry going forward. A significant shortfall is expected in the number of skilled animation and gaming professionals being churned out by the market and the actual industry requirement. The demand-supply gap meanwhile is being spurred by factors such as a lack of creative/gaming and animation culture, lack of awareness
about the employment potential of this industry and the absence of reputed training institutes to help students build necessary skill sets.
The manpower shortage: The animation industry employed around 16,500 professionals in 2006 and the
number is expected to go up to 26,000, at a CAGR of 14-15 per cent. Although the forecast growth is impressive,it falls short of the potential growth that the industry can achieve. The gaming sector too is facing the same issue.
Currently, there are nearly 150 gaming companies, employing around 2,500 people. This number is estimated to rise to 13,000 by 2010 (at a CAGR of over 50 per cent). While industry revenues are expected to grow ten-fold and touch US$ 424 million, it is still lower than the estimated potential of US$ 732 million that the gaming industry can achieve by 2010.
The animation gaming industry has the potential to generate approximately 34,000 jobs by 2010. However, the number of professionals joining this sector will be lower than this figure. This shortfall will be a result of factors such
as lack of proper training institutes, lack of trainers, awareness about the industry, accredited courses.
Furthermore, NASSCOM also expects there to be a gap in the capabilities of students coming out of the country’s training institutes and the needs of the industry. The training institutes themselves are not geared up in terms of infrastructure or faculty to provide high quality learning to students. Some institutes have set up branches across the country, which are not well equipped with global-class infrastructure or capable faculty. Moreover, a number of them are offering short duration programmes – basically three and six month courses – which do not produce high quality students.
The skills required for animation: The animation industry requires professionals who are equipped with both technical and soft skills.
On the technical side, potential career seekers for the animation industry need programming expertise, logical and analytical ability, understanding and application of the sciences such as Physics and Maths. The technical skills enable professionals to understand the logic behind creation of a good animation and facilitate the development of creative content. The analytical ability and application of science facilitates the creation of quality animation from the base structure and drawings.
On the soft skills side, animation professionals need knowledge of art and art application, communication skills,interpersonal skills and story telling. The soft skills help professionals to think creatively and develop animation
keeping in view the target audience and its aesthetics.
The skills required for gaming: The gaming industry needs creative, experienced people, particularly for the
task of concept development. Often, gaming companies hire consultants from abroad and creative directors from advertising/film industry for assistance.
For the pre-production stage, the gaming sector needs lead engineers, artists and animators. Programmers,meanwhile are needed for the production stage, where the skills required depend on the platform in use. The skills needed are essentially the know-how of the tools used for game programming.
The availability of relevant courses: While, there is an overall shortage of good training institutes catering to
the gaming and animation market, the industry has witnessed some changes over the last few years in the area of quality education for this sector. Institutes such as Whistling Woods International Ltd. (Mumbai), in collaboration with the Seneca College (Canada) are offering the latest courses in animation production and development. Yet
another institute is ZICA, which has a student exchange programme with IIT (Kanpur) and enables students to gain experience of new technology and production processes.
Animation and gaming education is also available from certain studios, who have set up their own captive training institutes in order to regularise the supply of talent professionals. Examples of such initiatives are Takshaa Training Institute (set up by Ittina Studios), the Graphiti School of Animation by Graphiti Multimedia, among others.

PS: The above article is copied from the NASSCOM IT industry Communique for the Academia. These are not my words but words of renowned NASSCOM members and a result of their research. My aim in writing this on blog was to let people know about it and for the people who don't believe me as I have been saying this since the past one and a half year. Thats all.