Gaming in India is a burgeoning market. Even with the recent figures in GDP decline, this particular ecosystem seems to be thriving. With multiple aspects to it, the industry seems to be attracting more and more indigenous aspirants.
While development studios are popping up by the day throughout the country, in some places it might be lacking investment. Many indie studios open-up and shut due to lack of investors while others make it by surviving on service-based work rather than IPs.
One of India’s largest gaming company, Nazara Technologies, has invested in a number of companies throughout the country and plan to keep it going. The CEO, Manish Agarwal gave us some insights on what they look for before investing in a company.
“That (investment) totally depends on the company’s stage at which it is”, says Agarwal.
If the product has been launched, it depends on how much BAU it has and how many installs have already been completed. Then the obvious KPIs become retention, engagement and hopefully monetisation.
“What you have is a simple framework of acquisition, attention, engagement and monetisation”
In acquisition – you look at how much is your paid and how much is your organic virality, engagement and time spent. While on engagement you look at short-term, long term, mid term and monetisation.
In terms of a company which does not have a live product, it doesn’t matter what the scale is, the higher the share, the higher the chance that it is able to achieve better metrics and stronger it is for investment. Now say, a company which doesn’t have a product, then its purely a function of what is the addressable size of the market…what kind of ideas, consumer understanding and insights does the founding team have. Also, the fun element in the prototype that is to be launched.
India being a mobile-first country, only a few developers are looking at developing games for PC or console. Investing seems to be a problem there too in some cases. In recent times, indie studio NoddingHeads went in to kickstarter for their upcoming projects Raji, where they failed to meet the desired amount, but have since continued work on a steady pace. Says the team, “Unfortunately it is. We are one of the few Indian Indie Dev teams developing for the PC and console market. So naturally, this seems to be a bone of contention with Indian investors. The thought of investing funds for more than six to twelve months seems too much of a risk and dare we say that this may be considered unnaturally long term for them. This is why we are looking further afield. Currently we do not have plans to develop for mobile, our focus is to make Raji the best we can within the time constraints we have and for future projects, create compelling games for this PC and console/market.”
Somewhat similar about the market was shared by Agarwal himself, “It’s because there are no publishers of PC in India and the publishing market is a mobile-first market. So people like me who are looking at investment are looking at mobile-first companies. For us, we are very focused on a domestic market and other emerging markets which are also mobile-firsts. Anybody who is working for the PC means they are predominantly catering to the western markets and I don’t have that understanding of the consumer there. So for me it’s not of strategic interest and I can’t really put my finger on whether it will succeed or not and hence I will not get into it.”
Shares another indie studio, Pocket League, “There needs to be cohesion or strategy with the types of products being made in a games company, for example targeting one specific genre, very deeply understanding the audience, creating a brand, and also, needless to say, having a data-driven approach. Investors are looking for an exit at the end of the day, and a gaming company has to focus on creating enough value to get there. They have to be able to sell their story to investors and show a clear path to creating a multi-million dollar business. Having said that, bringing in investment is just one approach.”
While investment for mobile gaming in the country seems to be on a brighter path, according to Agarwal these are the things that a studio looking for funding should keep in mind.
“If you are looking at an idea which is being funded, then you need to have KPI’s which have to be outlandish.” He further states, “if you are in your top five percentile whether in your long term retention, your virality, your monetisation or your engagement then you will be able to create a confidence in the investor that this game has legs to go.”
