The year 2007 surely belonged to the Indian gaming industry. Though investments made were larger than the returns, the number of people playing games certainly grew.

For instance, Zapak Digital Entertainment has, within a year of its launch, garnered 150,000 unique visitors and 270,000 total visits a day on its site. Till date, it has 4 million registered user with a total of 100 million page views.

Rohit Sharma, COO, said, "Currently one per cent of our free users are converted to paid customers for both downloadable games and cash games. This kind of percentage is a worldwide standard. However, with the launch of our Zapak Cards and the aggressive retail presence that we have across the country (over 5000 outlets), we expect the figure to rise to 30 per cent."

Indiagames.com, which adopted a completely different marketing strategy, is also growing fast. The company launched its subscription-based gaming for online users. It already has 10,000 users on its subscription model.

Vishal Gondal, founder and director, Indiagames said, "We expect the number to go up to 100,000 next year. While the growth is huge, we are still less than a per cent of the total broadband user base."

Players such as Games2win and Kreeda Games have even managed to attract Investment from the venture capital (VC) funds. While Games2win was able to raise $5 million from Clearstone and SVB, Kreeda Games received funding from IDG Venture India and Softbank.

Arun Natrajan, founder and CEO, Venture Intelligence said, "Gaming is definitely a sector that is attracting VC attention and we expect to see some investments happening in this space in the next few months. However, with the relatively high costs of gaming consoles and PCs in India, the real growth in this sector is expected to come from the mobile phone segment. While business models in the mobile gaming sector are at a nascent stage now, we can expect a couple of highly profitable companies to emerge in this space going forward."

The mobile gaming market today worths about Rs 120 crore (Rs 1.20 billion) and is expected to touch Rs 1,200 crore (Rs 12 billion) by 2011. With the average revenue per user (ARPU) is declining, operators are increasingly looking at ways to generate additional revenues -- mobile advertisements being one such option.

Advergaming -- placement of brands in mobile games -- is the fastest growing segment. Mobiles were the best way to showcase a brand and also interact with users, said analysts. Mobile2win, which has already worked with over 10 brands for advergaming, is in talks with 35-40 brands for similar tie-ups.

Rajiv Hiranandani, co-founder and country head, Mobile2win felt that advergaming would increase 300-350 per cent as brands were looking at this medium (mobiles) to reach customers.

Telecom players such as Reliance Communications [Get Quote] are increasingly looking at generating revenues from advergaming. Since 2003, it has associated with 40 brands across verticals. Mahesh Prasad, president, applications, solutions and content, felt advertisement on mobile was a serious opportunity.

 "Mobile advertisement is not all hype. Look at Japan, mobile advertisement is around $1.2 billion market. Every operators across the globe is furthering the concept. This medium gives the advertiser 360 degree approach to the campaign," he said.

However, Neeraj Roy of Hungama said while mobile gaming could grow, it was being hampered due to limited GPRS connectivity and available content.

 "Games on mobile continue and at present around 70,000-80,000 games get downloaded every day. But this is still small compared with other entertainment applications," Roy said.

The story is same for the console gaming segment as well. While analysts were sceptical on the uptake of console gaming due to price, major players such as Sony and Microsoft are bullish on growth.

The console gaming market in the country was expected to grow to $125.4 million (around Rs 500 crore -- Rs 5 billion) by 2010, said an iSuppli study.

The total install base of Sony Playstation in India is 300,000 (including grey market) and in 2008, the company is expecting a sale of 50,000-60,000 units. India is an important market can be gauged from the fact that the company reduced the prices of its game titles as well as of the consoles this year.

While, the company had earlier announced to cut price for gaming titles from Rs 999 to Rs 499, it recently reduced prices of Playstation3 from Rs 34,990 to Rs 29,990.

Antindriya Bose, country manager, Playstation, said, "The company feels that the price cut was important to get the Indian user at par with their European counterpart."

Mohit Anand, country head, Microsoft entertainment and devices division, is confident about the growth of console gaming in India.

"While we do not break numbers according to regions, worldwide we have shipped 14 million units. In India, though, the base is very small but we expect a growth of over 200 per cent," he said. Microsoft has also slashed the prices of gaming titles on the Xbox earlier this year.

Giant strides

• Online gaming is expected to be a Rs 800 cr market by 2010
• All major players are likely to tie up with studios abroad or Bollywood production houses for content
• Mobile gaming will be a Rs 1,200 cr industry by 2010
• Console gaming to touch the Rs 500 cr mark by 2010
• Advergaming -- placement of brands in mobile games -- is the fastest growing segment