Are you Game?

Grey Markets

At the grey markets of Bangalore, aka SJ Road and National Market, smuggled Sony Playstation 3 and XBOX 360's sit pretty on the shelves of vendors, willing to bargain up to 2/3rd the price offered at the showroom, to the interested customer. Alongside, you would find a huge range of pirated discs of games to play on your console. According to Vishwa (name changed), a grey market dealer, these smuggled consoles make their way to the markets via South East Asia. “ The games are often procured locally using Internet to download files and burn them en mass on cheap DVD's, or sourced from the biggest pirate market in this part of the world, Chennai. Youngsters come and purchase them because they are hooked and we give it to them for cheap,” says the burly dealer who makes a living on the increasing appetite for games among the city youngsters. While customers use pirated discs to load the game, piracy also helps the game become rampantly popular. They often need to go online and pay to play these games beyond a certain difficulty level. The more the game is pirated on disc, more the players paying for it online. Online Gaming portals, such as Zappak offer scratch cards and coupons starting from Rs. 100. These can be used for gaming online from home or used at Cyber Cafe's, a popular haunt for gamers.

Size of the Gaming Market

It is not only the grey market, but the sale of gaming consoles by Sony, Microsoft 360 and Nintendo Wii, have all been on the rise in the past 2-3 years. In the month of August 2009, the price of a Playstation 3 was pegged under $300 in US and UK. Consequently it was made available for under Rs.20,000 in the Indian market. There are 4.5 Lakh PS2 users, 1.35 Lakh PSP users and over 50,000 PS3 users in country. Sony now holds 85% share in the console market in India. According to Jacob Cherian, Editor of Skoar, India's only gaming magazine, the only way for this youth driven market is to go up. “While there is no estimate to assess how big the gaming industry in India is, with falling prices of consoles and games, there is a definite scope of growth and consolidation in the Industry. If the distributors of games can counter piracy and maintain their profits, the gaming culture will explode.” Plagued by losses due to grey markets and piracy, the distributors are using competitive pricing to increase volumes. The release of Grand Auto Theft 4 in 2008 has been a striking example. The hugely anticipated game was released in India for Rs. 500 and went on to sell 100,000 copies. This is believed to be the most sold disc in the gaming industry in India. Increasing popularity of online real time gaming is also increasing the scope of expansion of the formal market.

Stepping Stone to Digital Ecosystem

Microsoft's Bill Gates sees the Xbox console at the center of the future digital ecosystem, rather than at its periphery. The gaming console is a general purpose computer and not just a gaming device. For the manufactures at Microsoft and Sony, it is about strategically being in the living room. The ability of the consoles is to make wireless connections with the PC, serve as an Internet browsing machine and also, as a Blu Ray or High Definition disc player, all in the comfort of your living room. But before this is realized there are bigger challenges ahead for the gaming market. Piracy and Intellectual Property issues are looming large for manufactures and distributors, Manufactures are already working to create games for the Indian consumers that adhere to the local culture and cater to the unfamiliar local gaming habits. The innovative publishers with the right approach towards Indian youth will end up yielding great results.

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