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UTV Chairman Ronnie Screwvala is gung-ho about the gaming sector. Having invested Rs 270 crore (Rs 2.7 billion), including acquisition and investment in intellectual property, the company plans to invest another Rs 150 crore (Rs 1.5 billion).
Gaming is not new to UTV. The company used the acquisition route to enter the segment in 2007, when it acquired online and mobile gaming firm Indiagames. It simultaneously acquired the UK-based console gaming firm, Ignition. And finally in 2008, it acquired US-based True Games, an online gaming firm.
The strategy has worked so far. For fiscal 2009, the gaming content segment revenue (comprising online, console and mobile games) almost doubled to Rs 110.5 crore (Rs 11.05 billion). By FY10, the company expects the gaming segment to contribute 32 per cent to its total revenue (18 per cent in FY09).
Taking its gaming plans forward, UTV Media recently showcased three games -- War Devil (a third-person player game), Reich (a first-person player game) and El Shadai (an action and adventure game) -- at the Electronic Entertainment Expo gaming conference, one of the biggest events for the console gaming industry. The company has invested Rs 280 crore (Rs 2.8 billion) in the development of these three console games alone.
"I was taken by surprise and awe. Surprise, as we have had a first look of not one or two but three high-end games. Normally game companies track each other well -- so they are all surprised as to where and how long we have been working. And awe, as the quality and the game play, as well as the diversity, of the three games has really created an impact," Screwvala told Business Standard.
These games are being developed in its studios in Japan, London and Florida (US). The company, though, is yet to work out the additional investment that will go towards the marketing and distribution of these games.
The focus of its console gaming segment is clearly the international market. "Our three markets are international and there is nothing Indian about them. Our market in India for these games, too, is insignificant. Besides, in many cases we are creating our own patented technology for the games," added Screwvala.
While he did not share the revenue estimates these new console games will contribute, he explained, "The upside for even a moderately successful game is huge. We know our cost for creation is very competitive and lower than most in the industry. The gross margins on games can be anywhere between 40 and 300 per cent and if they are even a moderate success, they go into sequels and the margin increases."
In the online segment, UTV's True Games unit will be launching its own massive multiplayer online role-playing game by the second quarter of FY10 in the US and emerging markets like Turkey, Brazil, etc. This unit is also working on additional intellectual properties.
Indiagames, on its part, is focused on the mobile segment and has grown 120 per cent in FY09, with 60 per cent of market share in India, according to UTV. The company expects this will continue to have a growth rate of 50 per cent year-on-year for some more years.
