How foresight got Lakshya Digital to be part of the $80 billion gaming sector
From handheld gaming devices to smartphone games to high-end video gaming consoles, the gaming industry has come of age. With the growth of the industry, business has grown manifold in the country. According to Nasscom, the Indian gaming industry is currently pegged at $890 million.
According to the industry players, this revolution took place almost a decade ago, when outside players started showing interest in India as an outsourced destination for game manufacturing. Around 11 years ago, Manvendra Shukul, Shantanu Prakash and Dibyajyoti Chaudhuri foresaw the rise of the Indian gaming industry in the coming years in the country. In 2004, the trio Co-founded Lakshya Digital, a game development service. Today, the company hosts many top international gaming companies.
“The world’s gaming industry is worth $80 billion. The industry has been growing in the country, and so is the business around it. Games have three development cycles: design, technology and art. Art constitutes around 70% of the total cost of the game. In the game development service, we take care of art. With the growth of the gaming industry, the demand of our work, art, is increasing. This has brought business, and opportunities to grow in the sector, to us,” says Manvendra Shukul.
Lakshya’s growth trajectory
In 2004, the trio started the venture with a six-person team. In its first year, the company made no business. The, for two more years, it had to settle for the domestic market; that is, until the international gaming industry showed business interest in India.
The venture has also grown with the market. Today, the employee strength of the company stands at 300. It has been growing at the rate of 30% year-on-year. It has more than 60 clients. The client list of the company boasts of Japanese names like Namco Bandai, Square Enix and From Software. From the US market, they have names like Disney, Microsoft, Sony, Naughty Dog, and Zenimax on their client list.
Growth of gaming industry
The gaming industry has been growing gradually in the country. “In the last one decade, we have closely seen the gradual rise of this industry. The gaming industry is going to be the next big thing in the country,” says Manvendra.
The ever-increasing development cost of games, the bane of the international industry, has proved a boon for the Indian game developers. The development cost of average level game is around $15 million. The price escalates with the quality; the mid-level games cost around $30 million, and the top level games around $80 million.
“The game development price is continuously increasing, but tsale is almost stagnant. The disparity in cost and sales has led international gaming companies to consider outsourcing. In the past few years, India has been developed as one of the favorite outsourcing destinations. The outsourcing of gaming business from Japan and US, the two biggest gaming markets in the world, has opened the flood gates of business in India,” says Manvendra. Today, there are over 100 game development organizations in the countr,. catering to both the domestic and international markets.
Despite the growth and opportunities in development, the Indian gaming industry has to deal with challenges such as scarcity of skilled professionals and high prevalence of piracy.
“There’s no dearth of talent in the country, but most of them are unskilled. The country also lacks training institutions that could help students hone their art skills,” says Manvendra.
The rampant piracy in the gaming sector has also taken a toll on the industry.
The growth of the Indian gaming industry is attributed to the international market. The demand for high-end console games is not very impressive in the country. “The high-end console games are a bit expensive. Indian parents dither over spending money on consoles. These issues might riddle the high-end console industry in India, but there is huge potential in the market, and it is going to channelize it via other mediums,” says Manvendra.
The Indian gaming industry is penetrating the market via smartphones. The size of smartphone market has increased to 160 million. According to a study by Cisco, this number will reach 651 million by 2019. “Mobile games are gradually capturing the market and are going to be big soon. In India, people don’t mind spending on high-end expensive mobile phones. But when it comes to games, the sense of realism in these high-end smartphones is as high as that in consoles, so in next three years, the country will see a boom in the mobile game sector,” says Manvendra.