The move offers a return on investment in six months to a year.
Domestic gaming companies are increasingly plunging into the retail arena, a market segregated into two segments — mom and pop outlets and large format stores. They feel the segment offers a quick return on investment (RoI) besides providing an additional revenue stream.
For instance, Reliance Big Entertainment’s online gaming arm Zapak Digital, which entered gaming retail by launching 25 titles in partnership with various publishers from the US and Europe in June 2008, reckons that personal computer (PC) and broadband penetration would be the key growth drivers and therefore there would be a huge opportunity for gaming companies to get into retailing game CDs.
“Though console and PC gaming are big platforms globally, it is slightly different in India with all the platforms taking off simultaneously. The response from the consumer was overwhelming and the retail sales of our game CDs touched record sales in the very first year of selling 200,000 units just in six months. We intend to launch over 100 more titles for the retail market this financial year,” says Rohit Sharma, chief operating officer of Zapak.
Gaming, the fastest growing entertainment industry worldwide, currently has a market size of $48 billion. Of this, console and PC games contribute to more than 50 per cent, and therefore retail gaming market worldwide is huge. The Indian market, though not as mature as other Western and Asian markets, is in a growth phase. Right now, Zapak is concentrating on the Indian retail market as its potential has not yet been fully tapped, and expects its retail venture to contribute almost 20 per cent to our overall revenues, he adds.
Echoing his views is L Maruti Sanker, managing director of 7Seas Technologies, which recently took to retail gaming with the launch of six game CD packs in the domestic market. “Retail gaming offers quick RoIs — in six months to one year — a reason why many companies are jumping on to this bandwagon. We are set to test waters in the international retail gaming market with the launch of our multigenre game ‘Kraze’ for $19.99 in tie up with UK-based publisher Candella Systems in August this year. After the launch, we expect our retail venture to add 10 per cent to our revenues.”
Jayant Sharma, chairman and CEO of Milestone Interactive Software, a Mumbai-based distributor and seller of game software and hardware such as PlayStation and XBox, however, feels India is still scratching the surface as far as retail gaming is concerned but has great potential to grow.
“Piracy remains one of the biggest constraining factors and a source of revenue leakage. Growth of organised game retail will be a boost to official software availability in the country. More retail formats — consumer electronics stores, music, toys, entertainment, mobile retailers, hyper markets and supermarkets –— are set to open doors to gaming products as they see a traction building in this category. Specialist game retail chains too will start appearing in the near term and play a key role in growing the category,” Sharma says.
MileStone currently has an offering of over 200 console games in various formats and will add another 60-odd titles to its portfolio by the end of the current fiscal. With an estimated 20,000 console owners joining the gaming community every month, lower price bands is an attractive proposition for Indian consumers and thus there is a need to maintain a strong and quality catalogue offering, he adds.
But, for Mumbai-based Games2Win retailing is totally a different ball game as it feels that the concept of “expensive, boxed packed games” is dead. “We don’t have immediate plans of entering retail gaming as the time taken for a breakeven is typically three to five years and would absorb investment of about $20 million (Rs 100 crore),” says Alok Kejrial, chief executive officer of Games2Win.
