While animated feature films and TV broadcast were mainly offshore work from North America and Europe, VFX was largely a domestic phenomenon, ie Bollywood

FY 07 was also significant as the impact of convergence was more, especially for companies in the distribution space. With more and more distribution platforms being available, the importance of securing rights over content became paramount. As a result significant investments were made by companies in order to secure their content pipeline. For instance, Adlabs, along with Reliance Capital, acquired a 21% stake in Prime Focus. Disney acquired a 15% stake in UTV.

The year also continued with the trend of private equity investments, seen the year before. De Shaw invested Rs 40 crore into Crest Animation Studios, further picking up stake worth Rs 70 crore in Crests subsidiary, Rich Crest Holdings.

Prime Focus acquisition of a London-based post-production company in 2005 helped it bag significant contracts. For the first time the company handled the entire post-production work for a Hollywood film, 28 Weeks Later, yet to be released in India.

On the TV front, high budgets needed for VFX and poor pre-production planning were killers. Some serials with heavy use of visual effects were UTVs Hero, Shararat, and Ramanand Sagars Hatim Tay.

Game On
The Indian gaming industry was estimated at nearly $48 mn in 2006. Currently, mobile and console gaming together contribute nearly 75% of the total gaming market in India. Increasing mobile and broadband penetration along with the introduction of new generation consoles is expected to lead online and mobile gaming in the total Indian gaming scenario.

Themes revolving around Bollywood, Hollywood, cricket, racing, biking, and strategy games continued to generate interest. Leading player, Indiagames, recently launched Bruce Lee Iron Fist2D and 3D, Tradewinds 2, Battle Chess2D and 3D, Goodnight Mr Snoozleberg, and Movin Maze. The ones that the company has exclusive distributing rights for include 300, Harry Potter and the Order of the Phoenix, Moto GP 1, 2 and 3, Asterix and Cleopatra, Tour De France 2007, Fast & Furious Fugitive2D and 3D, Worms 2007, and Manchester United 6.

The PC gaming share was seen to be coming down, as piracy continued to plague the sector. The white sale market was estimated at about $4-5 mn in India.

Console gaming penetrated only the "creamy layer", and analysts say that unless prices are brought down drastically there will be no visible change.

The online gaming industry in India, on the other hand, did well with an estimated price worth Rs 24 crore. But nearly 20% of this revenue went directly to international players not based in India. The Indian market for online gaming is expected to grow with the entry of Zapak.com, Kreeda.com, and Gametantra.com.

The year saw Indian companies make high investments, and also look for investments from other animation and gaming players and venture capitalists. UTV Software Communications acquired 51% stake in Indiagames for Rs 168 crore and 70% stake in the UK-based Ignition Entertainment for Rs 60 crore in December.

Further, with an increase in animation spend, many animation companies seen to set up game development centers. DQ Entertainment set up an exclusive gaming division with an investment of $4.6 mn for games publisher and developer Electronic Arts.

Captive centers from global companies such as Gameloft and Jamdot also became a growing trend. The entry of IT companies in the field game development was a positive sign. Entry of Satyams Nipuna and Rolta India for game development and other gaming services was significant.

Urvashi Kaul
urvashik@cybermedia.co.in

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