Australia India Institute Volume 20, February 2021
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Australia India Institute Volume 20, February 2021
Fostering Opportunities in Video Games between
Victoria and India
Dr Jens Schroeder
Fostering Opportunities in Video Games between Victoria and India
The Australia India Institute, based at The University of Melbourne, is funded by Australian Government Department of Education, Skills and Employment, the State Government of Victoria and the University of Melbourne.
Summary Video games are booming all over the world, during the COVID-19 pandemic more than
ever. Australia and India are no exceptions. This policy brief focuses on the opportunities
for both Indian and Victorian game developers and educators in the context of the
Victorian government's support for its creative industries. Based on desk research and
discussions at the Victoria-India Video Games Roundtable conducted on 8 December
2020 by the Australia India Institute in collaboration with Creative Victoria and Global
Victoria, this report identified the following avenues for collaboration:
• Access to complementary expertise and talent in both countries
• Joint education programs and exchanges
• Victorian game developers working with Indian partners to adapt their games to the
Indian market and its complexities and challenges
Introduction Video games1 are one of the world's largest and fastest-growing entertainment and media
industries. In Australia, Victoria is the hotspot for game development. With 33% of all
studios and 39% of all industry positions,2 more studios call Victoria home than any
other state in Australia. Meanwhile, India's smartphone penetration has skyrocketed
to the point where the country has become the world's most avid consumer of mobile
gaming apps.
This policy brief sets out to explore how Victoria-based game developers and
educators can take advantage of this emerging market and the opportunities it presents.
It establishes a frame of reference by highlighting the characteristics of both markets:
India, as a highly complex mobile-centric consumer market whose traditional service
approach to games has resulted in unmet demand for certain production skills, stands
opposite a product-centric Australia, where the long engagement with video games
has led to a successful international outlook and track record and the corresponding
acquisition of expertise.
Based on these insights, this policy brief explores three areas of opportunity. First,
joint ventures that can support Indian developers to strive towards more sophisticated
products while Indian talent can support Australian studios in their growth.
Secondly, collaborations between educational providers and other stakeholders
with complementary skills applied to educational activities on a number of levels
(undergraduate, postgraduate, internships, incubators). Thirdly, partnerships where
Australian game developers wanting to enter the highly stratified Indian consumer
market can benefit from the Indian partner’s market insights.
1 Video and digital games are used interchangeably in this report. For purposes of this report, ‘games’ do not include
applications that replicate types of gambling in virtual form. While these games are made in Australia and are popular in India,
IGEA does not represent developers that focus on these kinds of titles. Members’ games can include behaviourist monetisation
techniques, but their core does not revolve around casino-style gameplay.
2 IGEA (2019) Australian Video Game Development Industry Contributes to Exports and Job Opportunities. https://igea.
net/2019/11/australian-video-game-development-industry-contributes-to-exports-and-job-opportunities/
4
Victoria’s Victoria's Creative State strategy highlights the importance of the sector to the state
economy. Creative industries – including digital games along with the visual and
Video Game performing arts, literature and publishing, music, screen production, design and fashion
– contributed $22.7 billion to Victoria’s economy in 2015 and employed 290,000 workers
Strategy
or 8.6% of Victoria’s workforce.3
While the Creative State strategy's original vision has been disrupted by the COVID-19
pandemic and its further development was paused to address the acute and immediate
impacts facing the sector, Victoria’s ongoing support of the creative industries is not
just reflected in temporary relief measures but also the ongoing maintenance of existing
programs. Initiatives include Film Victoria's Games Release Fund and Assigned
Production Investment for games as well as the recently announced allocation of AU$19.2
million to attract international and interstate screen projects to the state. The vast majority
of the investment will be committed prior to 30 June 2021 and will more than double Film
Victoria’s investment in the development of locally generated digital games.4
The Victorian gaming industry is also supported by the Interactive Games &
Entertainment Association (IGEA), the peak industry association representing the voice
of Australian companies in the computer and video games industry. IGEA supports the
business and public policy interests of the games industry, through advocacy, research
and education programs. Its mission is to create an environment that supports and drives
sustainable growth for the interactive games and entertainment industry.
Victoria’s commitment to strengthening the links with India in the digital gaming sector,
including gamification, is recorded in Victoria’s India Strategy. The strategy asserts
that Victoria will continue to promote and support commercial opportunities with
Indian partners,5 an initiative whose potential this policy brief will further explore. The
brevity of this paper and the ever-changing dynamics of the Indian market mean that it
should be treated as a step towards further conversations between the two countries for
exploring opportunities in more detail.
3 Creative Victoria (2020) About. https://creative.vic.gov.au/about
4 Film Victoria (2020) Press Release. Levelling Up Support for Victoria’s Digital Games Sector.
5 Victoria State Government (2018) Victoria’s India Strategy (Melbourne: Victoria State Government), p. 36.
5
Association (IGEA), the peak industry association representing the voice of Australian companies in
the computer and video games industry. IGEA supports the business and public policy interests of
the games industry, through advocacy, research and education programs. Its mission is to create an
environment that supports and drives sustainable growth for the interactive games and
entertainment industry.
Victoria’s commitment to strengthening the links with India in the digital gaming sector, including
gamification, is recorded in Victoria’s India Strategy. The strategy asserts that Victoria will continue
to promote and support commercial opportunities with Indian partners,5 an initiative whose
potential this policy brief will further explore. The brevity of this paper and the ever-changing
dynamics of the Indian market mean that it should be treated as a step towards further
conversations between the two countries for exploring opportunities in more detail.
The Global Video Games Market
The Global The interactive games sector is one of the largest and fastest growing entertainment and
media industries
The interactive games in the world.
sector is oneEstimated to be
of the largest andworth
fastestalmost
growingAU$280 billionand
entertainment globally
media by
Video Games 2023 in the1),
(Figure games are bigger
to bebusiness thanAU$280
films, music and books.
6
industries world. Estimated worth almost billion globally by 2023 (Figure 1),6
games are bigger business than films, music and books.
Market Figure
Figure 1:1:Global
Global Game
Game Market
Market Revenue
Revenue (1970-2022)
(1970-2022)
Source: Gamingscan. https://www.gamingscan.com/gaming-statistics/
3
Creative one
Already Victoria
of (2020) About. https://creative.vic.gov.au/about
the world’s largest and fastest-growing entertainment industries before
4
Film Victoria (2020) Press Release. Levelling Up Support for Victoria’s Digital Games Sector.
COVID-19
5 hit, gaming has further expanded during the lockdowns. With the ongoing
Victoria State Government (2018) Victoria’s India Strategy (Melbourne: Victoria State Government), p. 36.
global
6 proliferation
Tom Wijman (2020) TheofWorld’s
smartphones, new monetisation
2.7 Billion Gamers models,
Will Spend $159.3 and
Billion on the in
Games refinement of
2020. Newzoo.
https://newzoo.com/insights/articles/newzoo-games-market-numbers-revenues-and-audience-2020-2023/
revenue streams such as microtransactions, games are increasingly attracting mainstream
consumers. Video games have amongst the largest support base of any creative industry
with over 2 billion gamers globally. The traditional markets of North America and Europe
have seen accelerated growth rates, and the Asia-Pacific region has an estimated 1 billion
gamers and already accounts for more than half of all global game revenue.7
Video Games Gaming in India has grown on the back of smartphone penetration, low data costs,
improved bandwidth, growth in micropayments and the rise in disposable income. The
in India
number of smartphone users in India was expected to reach 530 million by the end of
20208 while the number of all gaming consumers was poised to rise to 628 million within
the same timeframe.9 As a result, the Indian mobile games market alone is expected to
grow to US$1.1 billion.
Traditionally, access to video games in India has been limited; the high cost of hardware
and the need to install games from physical media resulted in a limited appeal of PCs
and consoles as well as a comparatively underdeveloped gaming culture.10 Increased
accessibility came with (Android) smartphones and the ability to download mobile
applications and games over WiFi and mobile networks at low costs (with 1 GB of
data costing AUD 1$ or less). Excluding Chinese third-party app downloads, India
was the leading market for app downloads in Q2 2020, with nearly 7 billion, followed
6 Tom Wijman (2020) The World’s 2.7 Billion Gamers Will Spend $159.3 Billion on Games in 2020. Newzoo. https://newzoo.
com/insights/articles/newzoo-games-market-numbers-revenues-and-audience-2020-2023/
7 Guilherme Fernandes (2019) Navigating the world’s fastest-growing games market: Insights into Southeast Asia NewZoo.
https://newzoo.com/insights/articles/navigating-the-worlds-fastest-growing-games-market-insights-into-southeast-asia/
8 Austrade India (2019) Digital Games Sector Market Insights (Perth: Austrade), p. 2.
9 2020: The up-and-coming year for Indian gaming industry! Hindustan Times. https://www.hindustantimes.com/brand-
stories/2020-the-up-and-coming-year-for-indian-gaming-industry/story-FZdh2XYuCVmXF5DoomuovK.html
10 Austrade India (2019), p. 2.
6by the US with around 3.75 billion.11 Correspondingly, India has also become one of
the top five markets for mobile gaming in terms of number of users.12 In 2019, around
5.6 bn mobile gaming apps were downloaded in India – the highest in the world and
representing nearly 13% of gaming apps globally.13 Between 2016 and 2019, Indian app
downloads grew 190% (Figure 2). In addition, mobile games account for 80-90% of the
overall online gaming segment. KPMG classifies over half of India’s 365 million gaming
consumers as “online gamers.”14
PC and console gaming are projecting muted growth, catering to a limited, albeit
engaged, audience. ‘Hardcore gaming’ in its traditional form demands time and
dedication along with access to PCs or consoles and therefore appeals to a smaller set
of audiences. In contrast, mobile gaming is expected to gain at their expense, given its
inherent flexibility and convenience.
Figure 2: Growth in app downloads by country, 2016-2019 (App Annie)
GLOBAL CHINA INDIA UNITED BRAZIL INDONESIA
45% 80% 190% STATES 40% 70%
5%
Source: Iqbal (2020)
In terms of demographics and user engagement, India is approximating global trends.
In 2018, the average time spent on gaming was close to reaching the global average
(6.92 hours per week for India vs 7.11 hours per week for the rest of the world). While
a younger audience still dominates, older players are increasingly engaging; nearly
one-third of the gaming population in India is now aged over 35 years. Moreover, the
percentage of female gamers has risen to 45%.15 Women in India are showing increased
interest in online gaming and spend similar time on gaming applications compared to
men in India (Figure 3).
11 Mansoor Iqbal (2020) App Download and Usage Statistics (2020) Business of Apps. https://www.businessofapps.com/data/
app-statistics/
12 KPMG (2019) India's Digital Future (India: KPMG), p. 106. https://assets.kpmg/content/dam/kpmg/in/pdf/2019/08/india-
media-entertainment-report-2019.pdf
13 Iqbal (2020).
14 KPMG (2019), p. 106.
15 KPMG (2019), p. 105-106.
7Source: Iqbal (2020).
In terms of demographics and user engagement, India is approximating global trends. In 2018, the
average time spent on gaming was close to reaching the global average (6.92 hours per week for
India vs 7.11 hours per week for the rest of the world). While a younger audience still dominates,
older players are increasingly engaging; nearly one-third of the gaming population in India is now
aged over 35 years. Moreover, the percentage of female gamers has risen to 45%.15 Women in Ind
are showing increased interest in online gaming and spend similar time on gaming applications
compared to men in India (Figure 3).
Figure 3: Minutes per visitor by gender (selected countries)
Figure 3: Minutes per visitor by gender (selected countries)
Source: Global Victoria (2020). Presentation: Session on the Indian Gaming Ecosystem – Overview, Challenges,
Source: GlobalTrends
Victoria (2020). Presentation: Session on the Indian Gaming Ecosystem – Overview,
and Opportunities.
Challenges, Trends
Due toand
theirOpportunities.
free-to-play approach, casual games – including casual ‘real money’ games
such as rummy, poker, fantasy sports, and quiz games – are the most popular genre in
India (see Table
Due to their free-to-play 1).16 These casual
approach, types of games
gamesare–played by approximately
including 80%money’
casual ‘real of all gamers.
games such as
A successful example of a casual game is Ludo King. Based on the eponymous board
rummy, poker, fantasy sports, and quiz games – are the most popular genre in India (see Table 1).1
game, this locally developed title was the first Indian gaming app to surpass 100 million
These types ofdownloads.
games are By played by approximately
January 2020 80%
it had surpassed 300 of all
million gamers.and
downloads A could
successful
boast 75example of a
casual game ismillion
Ludo King.
monthly Based
active on the
users. eponymous
COVID-19 board
lockdowns game, this
encouraged locally
an even developed
stronger uptake of title was th
first Indian gaming app of
these types togames
surpass 100 million
and attracted downloads.
new users By January
in the process. 2020 itLudo
Correspondingly, hadKing’s
surpassed 300
adoption further accelerated, in the second quarter of 2020 alone it was downloaded over
60 million times, making it the world’s fifth-most popular app.17
15
KPMG (2019), p. 105-106.
KPMG (2019),Likewise,
p. 104. other non-fantasy real money games continued to see “tremendous uptake,”
18
16
with traditional card games such as Teen Patti, Rummy and Poker continuing to lead the
segment due to their potential for social connection, mass appeal, and loyal user base.
16 KPMG (2019), p. 104.
17 Iqbal (2020).
18 KPMG (2019), p. 107.
8million downloads and could boast 75 million monthly active users. COVID-19 lockdowns
encouraged an even stronger uptake of these types of games and attracted new users in the
process. Correspondingly, Ludo King’s adoption further accelerated, in the second quarter of 2020
alone it was downloaded over 60 million times, making it the world’s fifth-most popular app.17
Likewise, other non-fantasy real money games continued to see “tremendous uptake,”18 with
traditional card games such as Teen Patti, Rummy and Poker continuing to lead the segment due t
their potential for social connection, mass appeal, and loyal user base. Over half (55%) of the US$1
billion Indian games market comes from real money gaming; the prospect of earning some money
on the side and ability to show off one’s skills drive annual growth rates between 40% and 50%.
Over half (55%) of the US$1.1 billion Indian games market comes from real money gaming;
Tablethe
1: Top mobile
prospect gamessome
of earning in India 2019
money on the side and ability to show off one’s skills drive
annual growth rates between 40% and 50%.
Table 1: Top mobile games in India 2019
Source: Global Victoria (2020). Presentation: Session on the Indian Gaming Ecosystem – Overview, Challenges,
Trends and Opportunities.
Source: Global Victoria (2020). Presentation: Session on the Indian Gaming Ecosystem – Overview,
Online fantasy sports, meanwhile, suffered a temporary setback. While witnessing strong
Challenges, Trends and Opportunities.
growth on the back of India’s Premier Cricket League in 2019 (Figure 4), these games were
negatively impacted by the cancellation of sports events due to the COVID pandemic.19
Online fantasy sports, meanwhile, suffered a temporary setback. While witnessing strong growth o
the back of India’s Premier Cricket League in 2019 (Figure 4), these games were negatively impact
by the cancellation of sports events due to the COVID pandemic.19
17
Iqbal (2020).
18
KPMG (2019), p. 107.
19
Poonam Mondal (2020) By 2022 gaming sector will witness growth in revenue at 45 per cent CAGR: KPMG
Animation Express. https://www.animationxpress.com/games/by-2022-gaming-sector-will-witness-growth-
revenue-at-45-per-cent-cagr-kpmg/
19 Poonam Mondal (2020) By 2022 gaming sector will witness growth in revenue at 45 per cent CAGR: KPMG. Animation
Express. https://www.animationxpress.com/games/by-2022-gaming-sector-will-witness-growth-in-revenue-at-45-per-cent-
cagr-kpmg/
9Figure 4: Growth in Indian Fantasy Sports
Figure 4: Growth in Indian Fantasy Sports
Source: KPMG (2019), p. 108.
The growth of the Indian games market also highlights how gaming platforms are emerging
as community networks beyond mere entertainment, enabling families and friends to
Source:
connect and share experiences. KPMG
In 2018, Hello(2019), p. 108.
Ludo introduced an in-game voice chat that
resulted in daily active users spending more than 25 minutes in it. Almost half (46%) of
the Indian Player Unknown's BattleGrounds Mobile (PUBG Mobile) players use the in-game
The growth of the Indian games
voice chat featuremarket also
to discuss not onlyhighlights
game tactics buthow gamingtopics
also non-PUBG platforms
at length.20 are emergin
(PUBG is the pioneer of the hugely popular ‘battle royale’ genre, “a large-scale free-for-all
community networks death
beyond mere
match with entertainment,
the goal enabling
to be the last player alive.
”)21 families and friends to connec
share experiences. In What
2018, Hello Ludo introduced an in-game voice chat that resulted in d
all these numbers do not immediately reveal is the diversity of the Indian market.
users spending more than
India is 25
not aminutes in it.butAlmost
monolithic block half (46%)
a highly complex ecosystemof the
with Indian Player Unknow
demographics
extending across the whole range of the socio-economic spectrum and a rapid evolution in
BattleGrounds Mobilegamers’
(PUBG Mobile) players use the in-game voice chat feature to discuss
tastes – even further accelerated by COVID-19 – illustrated in the astronomic rise
game tactics but also ofnon-PUBG topics
battle-royale action at length.
title PUBG Mobile into (PUBG
20
is the pioneer
the charts alongside ofcasino
the casual and the hugely popu
royale’ genre, “a large-scale free-for-all death match with the goal to be the last player aliv
games that have dominated (see Table 1).
In 2019, there were between 33 and 50 million PUBG Mobile players in India. By early
2020, 116 million downloads came from the subcontinent, a number amounting to 21%
What all these numbers do downloads.
of global not immediately
22 reveal
The trend towards moreis the diversity
sophisticated mid-coreof the Indian
to hardcore games market. In
monolithic block but awith
highly complex
multi-player setups isecosystem with
also reflected in the demographics
popularity extending
of Garena Free Fire, which saw across the
a marked increase in downloads after the Indian government banned the Chinese-made
range of the socio-economic
PUBG Mobile spectrum
due to borderand a rapid
tensions evolution
with China. Indian gamersinalso
gamers’
accountedtastes – even furth
for 15% of
accelerated by COVID-19
global – illustrated
downloads of 2020’sin thehitastronomic
global title Among Us. rise of battle-royale action title PU
23
into the charts alongside the casual and casino games that have dominated (see Table 1).
20 KPMG (2019), p. 107.
21 Alessandro Fillari (2019) Battle Royale Games Explained: Fortnite, PUBG, And What Could Be the Next Big Hit.
Gamespot. https://www.gamespot.com/articles/battle-royale-games-explained-fortnite-pubg-and-wh/1100-6459225/
In 2019, there were between 33 and 50 million PUBG Mobile players in India. By early 2020
22 Kayleigh Partleton (2019) PUBG Mobile shoots through $1.5 billion in lifetime revenue Pocket Gamer. https://www.
pocketgamer.biz/asia/news/72145/pubg-mobile-1500000000-lifetime-revenue/
million downloads came from the subcontinent, a number amounting to 21% of global dow
23 Ananya Bhattacharya (2020) Nearly 20% of all mobile game downloads in the world this year were from India. Quartz
India. https://qz.com/india/1937845/pubg-among-us-crazy-indians-downloaded-7-3-billion-games-in-2020
The trend towards more sophisticated mid-core to hardcore games with multi-player setu
10 reflected in the popularity of Garena Free Fire, which saw a marked increase in downloadsThis evolution in taste coincides with a burgeoning e-sports scene. India is ranked number
17 in the US$1.5 billion e-sports industry and is growing rapidly.24 Mobile-based games like
PUBG Mobile and Garena Free Fire helped to overcome latency problems (delays between
user actions and game responses) and the lack of expensive high-end computer hardware,
the traditional platform of choice for e-sports titles. E-sports personalities are emerging, the
prize pools for e-sports tournaments are increasing and, further accelerated by COVID-19,
viewership of streamed e-sports competitions is gaining popularity with the potential to
match the viewership of major sports event over the next five to seven years.
The dominant monetisation strategy, regardless of genre, is free-to-play. The casual segment
is largely supported by in-game advertising although there has been an increase in the
popularity of freemium models (gamers making an in-game-purchase for an additional
boost or to advance quicker in the game), as part of the uptake of mid-core to hardcore
games. In 2019, 28% of gamers were willing to make an in-app purchase for an additional
boost in their gaming experience. While the casual segment relies on in-game advertising,
it is also starting to witness this change in monetisation approaches.25 Expectedly, gamers
from an older demographic have a higher propensity to spend on games due to higher
disposable income. Furthermore, growth in fantasy sports and other real money gaming
platforms is likely to accelerate monetisation even further.
Monetising mobile games represents the biggest opportunity for growth, but it is also the
most vexing barrier. India paints the image of a market whose strength primarily lies in
its sheer size while ongoing claims of its imminent explosion are yet to (fully) materialise.
Ultimately, while the market appears very large from the outside, the number of people
willing to make in-game-purchases is limited to about 40-50 million. That is not to dispute
the industry's tremendous growth in India, but rather to demonstrate the nuance and
complexities of the Indian demographics and cultures.
Monetisation is also curtailed by India’s predominantly cash-based economy. There are only
20 million credit cards in circulation in India, the idea of credit is viewed with a certain
scepticism, and the consumer base is cost conscious.26 In recent commentary on average
revenue per user among newly released games in 2019, mobile analytics company App
Annie stated that India generated “zero” revenue.27 This somewhat exaggerated statement
primarily serves to highlight the disparity between the number of downloads and paying
users, and does not take into consideration real money apps as these are downloaded
outside of Google’s Play Store. Nevertheless, international developers need to be mindful
of the need to find their niche between casual and hyper casual ad-monetised mobile
games with little scope for in-app-purchases outside of the real-money gaming scene, and
the narrow monetisation band of the global phenomena of games like Clash Royale and
PUBG Mobile.28 While in-app-purchases have grown between 70-80% over the last year,
this growth has been very concentrated and mostly confined to the top three or four games.
Revenue drops considerably for titles any lower on the charts.
24 The rise of eSports in India Business Matters. https://bmmagazine.co.uk/business/the-rise-of-esports-in-india/
25 KPMG (2019), p. 107.
26 Haydn Taylor (2019) IGDC: Solving the Monetisation Problem in India Gamesindustry.biz. https://www.gamesindustry.biz/
articles/2019-01-09-solving-the-monetisation-problem-in-india
27 Amit Raja Naik (2020) India Tops the World for App Downloads. But Has ‘Zero’ Gaming Revenue: App Annie. Inc42.
https://inc42.com/buzz/india-tops-the-world-for-app-downloads-but-has-zero-revenue-app-annie/
28 Taylor (2019).
11Another “major roadblock” is the ambiguity around the laws that govern gaming in
India, in particular real money games.29 Under most Indian laws, gambling activities are
referred to as ‘gaming’. Though the Constitution of India gives states the power to pass laws
regulating gambling and betting, there is no clarity regarding online gaming.
Despite these challenges, the Indian market is poised for continued growth. An expanding
user base, advanced monetisation strategies, the growth in e-sports and expanding
infrastructure translate into an estimated compounded growth rate of 32% over the period
between 2020 and 2024.30
Video Games Australians spent over $4 billion on video games and games hardware in 2018, a 25%
increase from 2017.31 This means Australians spend more on games than they spend on
in Australia
films (three times as much32), streaming services, Pay TV, music, books or likely any other
creative or entertainment activity (Figure 5). Spending dipped below $4 billion in 2019 due
to the 8th console generation (PlayStation 4 and Xbox One) reaching the end of its lifecycle
but is expected to pick up considerably in 2020 with major new hardware and games
releases due and in light of the increase in game play during the COVID-19 pandemic.
A recent PwC report places Australia as one of the highest per capita spenders on video
games in the world.33 This affection for games is also reflected in the demographics of
Australian consumers: two out of every three Australians play games; the average age of
the Australian game player is 34 and video games are almost equally played by males and
females. Over 40% of Australians aged over 65 play games to keep their minds sharp, to stay
active, and to spend time with their grandchildren. Moreover, nine out of ten Australian
households own at least one gaming device.34
Australians’ close relationship with games also translates into a long history of successful
game production. Australian-made games featured heavily on home computers in the
1980s. Beam Software's The Hobbit introduced ground-breaking gameplay and sold over
a million copies while their Way of the Exploding Fist paved the way for ‘beat-em-ups’. In
1986, Beam International sales had ten per cent of the UK market across all formats. The
1990s and early 2000s saw the birth of new studios and the export of titles popular on
the international stage. Australian studios released or worked on such innovative titles as
Dark Reign, Destroy All Humans, LA Noire or BioShock and cemented their reputation as
world-class sources of game content. In a changing industry, Australian studios successfully
rode the wave of mobile games. Flight Control started a trend that saw Fruit Ninja being
downloaded more than a billion times and Crossy Road climb the worldwide app charts.
In recent years, the PC became the dominant platform for game developers and games like
Hacknet, Satellite Reign, Ashes Cricket or Hand of Fate demonstrated Australia's continued
versatility and ability to create internationally successful intellectual property (IP).
29 KPMG (2019), p. 109.
30 KPMG (2019), p. 109.
31 IGEA (2019) Consumer spending breaks through the $4 billion mark. https://igea.net/2019/05/aussies-love-for-video-games-
continues-to-grow
32 Screen Australia (2019) 2019 Snapshot: Cinema Industry Trends. https://www. screenaustralia.gov.au/fact-finders/cinema/
industry-trends/ box-office
33 PwC (2020) Australian Entertainment & Media Outlook 2020-2024 (Sydney: PwC), p. 13.
34 IGEA (2019) Digital Australia (Sydney: IGEA), p. 7.
12Figure 5: Entertainment and media Industry revenue and share by sector for 2019
(actual) and 2024 (forecast)
Source: PwC (2020), p. 3. Source: PwC (2020), p. 3.
A recentAPwC
recent survey
report by IGEA
places found as
Australia that,
oneinofthethe
2018-2019
highest perfinancial
capita year, Australian
spenders studios
on video games in the
world.33generated $143.5for
This affection million
games (see Appendix
is also A).35inThe
reflected thelocal industry employed
demographics 1,275 fulltime
of Australian consumers: two
equivalent
out of every threeemployees
Australians and,
playowing to itsthe
games; small domestic
average agemarket, generated 83%
of the Australian game ofplayer
its is 34 and
revenue
video games areoverseas. There has
almost equally been aby
played marked
malesincrease in focus
and females. on Asian
Over 40% ofmarkets,
Australianswith aged
65% over 65
of respondents
play games to keep theirdeveloping for Asian
minds sharp, markets,
to stay active,up and
fromto37% in 2017.
spend timeOther international
with their grandchildren.
markets
Moreover, nineinclude the US
out of ten and Europe.
Australian Australian
households ownstudios
at leastareone
creative
gamingand device.
focused34with
almost two-thirds (61%) of respondents exclusively developing their own IP. A further
Australians’ close relationship with games also translates into a long history of successful game
production. Australian-made games featured heavily on home computers in the 1980s. Beam
Software's The Hobbit introduced ground-breaking gameplay and sold over a million copies while
35 IGEA (2019) Australian Video Game Development Industry Contributes to Exports and Job Opportunities.
their Way of the Exploding Fist paved the way for ‘beat-em-ups’. In 1986, Beam International sales
had ten per cent of the UK market across all formats. The 1990s and early 2000s saw the birth 13 of
new studios and the export of titles popular on the international stage. Australian studios released28% develop their own IP alongside producing games and services for clients. Australia-
wide, the sector also proved to be largely resilient to the effects of COVID-19. IGEA’s 2020
COVID survey identified that 84% of respondents were not planning to make any staff
cutbacks or redundancies in the immediate term and 44% of surveyed developers reported
stable or increased sales revenues.36
To put the Australian market into perspective, the $143.5 million represents a capture of
only 0.05% of the global market. Australia’s game development industry is world-class
yet underdeveloped. Thanks to expenditure-based tax incentives, other regions were
able to grow their industries into billion-dollar enterprises, Canada and the UK being
prominent examples. Australian Government support will be crucial to the development
of a robust and sizeable Australian industry that is a in a better position to capture global
opportunities, including the opportunities of the Indian market.
The state of Victoria demonstrates what targeted government investment – production
incentives and offsets as well as travel and production grant programs – can achieve. More
Australian game development studios continue to call Victoria home than any other state.37
The majority of the Australian games workforce is based in the state, and there is a steady
supply of graduates from highly-ranked universities and specialised institutions. Victoria
is home to some of Australia’s most significant and successful games titles and studios (see
Appendix B). Victoria is also home to Australia’s biggest e-sports event, the Melbourne
Esports Open, while Melbourne has been recognised as Australia’s top tech city on the
Savills Tech City Index.38
Melbourne's importance as an epicentre for game development and culture is also reflected
in it hosting Melbourne International Games Week (MIGW), Asia Pacific’s largest digital
games celebration which features Game Connect Asia Pacific (GCAP), Australia's premier
conference for game developers, and PAX, Australia's largest consumer expo. MIGW serves
as an event to bring industry stakeholders from various countries together.
36 IGEA (2020) Australian Video Games Industry Resilient Despite COVID-19 Impact. https://igea.net/2020/05/australian-
video-games-industry-resilient-despite-covid-19-impact/
37 Global Victoria. Digital Games. https://global.vic.gov.au/victorias-capabilities/industry-sectors/digital-technologies/digital-games
38 Savills (2019) Tech Cities in Motion. https://www.savills.co.uk/research_articles/229130/274942-0
14Opportunities The SWOT analysis at Appendix C provides the general context for the specific
opportunities listed below that were identified at the roundtable and through the
consultation process.
1. Game Development Collaborations
In line with local preferences, the Indian-made mobile games that dominate the charts
primarily revolve around casino-style or hyper casual gameplay. They do not rely on
elaborate narrative structures, complex economies associated with bigger budget titles,
intricate game design or the continuous enhancement via live operations. Accordingly, there
are gaps in the knowledge of the entire production pipeline of more substantial games and a
corresponding shortage of skills. India is not currently in a position to produce AAA console
or PC titles (games with multimillion-dollar budgets for both production and marketing).
While the industry is catching up rapidly, facilitated by the presence of overseas
studios such as Ubisoft and Zynga and the associated transfer of expertise, a push for
complementary skill sets via joint ventures with studios from mature industries holds
promise. Victorian game developers are particularly well aligned with this opportunity due
to their focus on international markets – 83% of the income of the Australian industry in
2018/19 was generated overseas.
This facilitation of complementary skill sets can go both ways and take the form of joint
ventures or acquisitions in each country. Traditionally, Australia has focused on product
development whereas India has had a service mindset. Indian game developers could
leverage Australian expertise to create more complex games for local and international
markets, while Victorian developers could leverage India's low-cost raw talent pool to scale
and address bottlenecks. Victoria could support India taking a short cut to more advanced
games, while India could support Australia's return to big-budget productions by means of
its workforce.
Lakshya Digital is an example of the latter strategy. Their extension into the US and other
overseas markets completed the production pipeline by adding a managerial/seniority level
which supplemented the art leadership in India (where even today there remains unmet
demand for these skills). This setup, in turn, allowed their clients to take on a greater
number and larger scale productions and facilitated Lakshya Digital's growth from six to
almost 600 staff.
Conversely, there is potential for Australian expertise to collaborate with the Indian
industry to create bigger games that convey Indian stories to local audiences and the
wider world, a strategy that enjoys the support of India's Prime Minister. In August 2020,
Narendra Modi called for India to tap the huge potential of the digital gaming industry and
“lead the international digital gaming sector by developing games that are inspired from
Indian culture and folk tales.”39
39 Press Information Bureau (Government of India) (2020) Press Release. PM convenes meeting to discuss ways to boost toy
manufacturing in India. https://pib.gov.in/PressReleasePage.aspx?PRID=1647971
15While Western games and gameplay mechanics are popular, this is mostly because of the
relative immaturity of the local games industry in a market that highly values local content
on other platforms and is already undergoing a rapid evolution in terms of gaming tastes
moving towards more complex titles. The rewards of this opportunity might not materialise
in the short term and there is the risk of not gaining traction in the marketplace, however,
this path promises exponential rewards in the long run.40
2. Education
The facilitation of expertise also underwrites the possibilities in the educational space.
The skills gaps in the Indian games industry could be addressed through collaborative
efforts between Indian and Victorian universities and specialised vocational education
institutions. Victoria produces over 1,000 graduates a year from 29 games-related courses
and 20 academic institutions and plays an important role in the education of the sector
workforce. The growth of the Indian gaming industry means that games are increasingly
seen as a viable career path, with the field attracting talent across the value chain from
artists, programmers, designers and app developers. Indian education is now catering to
these skills, and there are opportunities for Victorian education providers to supplement
the technical expertise developed under the Indian education system by providing a more
interdisciplinary and holistic outlook that, in addition to practical skills, develops expertise
in advanced game design, narrative psychology and cultural studies.
This could take the form of a finishing school where Indian students complete their studies
overseas to ‘fine-tune’ their craft and facilitate their entry into the (international) industry.
One example of this model is Arena Animation, one of the oldest animation and VFX
training centres in India, which entered into a collaboration with Vancouver's Langara
Centre for Entertainment Arts. Students study a year in India before completing the
remainder of the course in Canada.
This broader approach to education aligns with India's new National Education Policy
(NEP). Launched in July 2020, the NEP posits a liberal education that is multidisciplinary
and holistic, encompassing creativity, collaboration, social responsibility, multilingualism,
and digital learning.41 Video games represent this kind of interdisciplinarity, as the
intersection of all arts, animation, music, sound and even architecture, while being driven
by technology and promoted by advanced marketing and commercialisation techniques.
The opportunities identified in India's National Education Policy also extend to the use
of games in education. The NEP notes the emergence of digital technologies and the
increasing importance of leveraging technology for teaching and learning at all levels from
school to higher education. It plans the establishment of a digital repository of content
including learning games and simulations, augmented reality and virtual reality. It
envisages “fun based” learning using apps and the gamification of Indian art.42
40 This is similar to Naspers Limited, a South African-based consumer Internet company, which invested US$32 million into
Chinese gaming giant Tencent in 2001, a venture that had grown to US$129 billion in 2019. Phoebe Jin (2019) Naspers and
Tencent: the investment case Spaceship. https://www.spaceship.com.au/learn/naspers-tencent-investment-case/
41 Government of India (2020) National Education Policy 2020, p. 5; Craig Jeffrey (2020) A Very Short Policy Brief. India's
National Education Policy (Melbourne: Australia India Institute), p. 5.
42 NEP, p. 59.
16The NEP also envisages online education as a vehicle for increasing access to quality higher
education, which is another avenue of potential collaboration for Victorian education
providers with expertise in online and distance learning. Games have the advantage that
they can be made remotely, something highlighted by collaborative work practices brought
about by the COVID-19 pandemic. In IGEA's COVID survey, 71% of respondents reported
they had successfully transitioned to working from home with another 22% reporting they
were already operating remotely.43
Other forms of potential collaboration include joint coursework where Australian students
engage in prototyping activities with another overseas university, student exchange programs
and study tours, and shared curricula where an Australian university would primarily focus
on the theoretical and philosophical backdrop whereas the production work would be done
locally. Such an arrangement exists between RMIT Vietnam and RMIT Melbourne.
Australian educators could collaborate with their Indian counterparts in developing links
with the games industry, in particular studios operating across both countries, in such areas
as internships. These could be integrated into the curriculum, although this approach needs
to consider the possibility of a lack of direct placements due to the size of the local industry
and the subsequent need to provide alternative work integrated learning options (educational
activities that integrate academic learning of a discipline with its practical application in the
workplace). An example would be the replication of game production within the place of
learning under industry supervision. An alternative model would be fully funded internships
that would allow graduates to embed themselves into a company for three months or other
periods of time, leading to a job offer or take the gained knowledge back home.
Australia could partner with India in the development of research capacity and contribute
to the building of an Australia-India research nexus by means of faculty exchange,
developing post-doctoral networks, and enhancing opportunities for two-way student
mobility. Further opportunities in this context would revolve around complementary
skills and exposing Indian students to international design contexts. Students could also
be introduced to sectors tangentially related to ‘traditional’ games making, such as virtual
reality and games for purposes other than entertainment such as healthcare or education, a
sector that holds immense promise in the Indian market.44
Outside of the academic space, the exchange of knowledge and skills could also take place
within incubators such as IMAGE, India’s first Centre of Excellence (CoE) for gaming, VFX,
computer vision and AI in Hyderabad. Set up by Software Technology Parks of India and
backed by the Telangana government, and industry partners Telangana VFX, Animation
and Gaming Association, with the objective of incubating 25 to 30 start-ups annually for
the next five years, it offers mentoring, technology support, infrastructure, and funding. An
exchange program with Australian partners such as Melbourne’s The Arcade, Australia’s
first, not-for-profit, collaborative workspace created specifically for game developers and
creative companies, could lead to cross-pollination and hone the mutual understanding of
the opportunities each market and games ecosystem has to offer.
43 IGEA (2020) Australian Video Games Industry Resilient Despite COVID-19 Impact.
44 Sindhuja Balaji (2020) How Are India's Biggest EdTech Startups Winning Students? By Treating It Like A Game Forbes.
https://www.forbes.com/sites/sindhujabalaji/2018/03/11/how-are-indias-biggest-edtech-startups-winning-students-by-treating-
it-like-a-game/?sh=149e51c06908; Vibha Chetan, et al. (2018) Gamification: the Next Evolution of Education. Proceeding of the
International Conference on Future of Education 1 (2018), p. 38-49. https://doi.org/10.17501/26307413.2018.1106.
173. Victorian Game Developers Entering the Indian Market
Given the sheer size and growth of the India video games market, it seems obvious
that Victorian studios would attempt to make their games available to these hundreds
of millions of new consumers. Yet market entry into India can be challenging. While
Western games and their art and gameplay are popular, India is a highly complex market
that encompasses a spectrum of socio-economic groups, local cultures and ever-evolving
tastes. The monetisation band is very narrow and dominated by global games that are
able to engage the limited number of gamers with capacity to make in-game-purchases.
Ad-supported casual games rarely pay more than 1-2 cents per user and primarily work
through sheer volume, while real money games remain off limits due to the lack of
legislative clarity.
Victorian developers considering the Indian market need to be realistic about their
expectations. Part of this is the ongoing need to calibrate the product/market fit, and the
tight management of in-game economies to ensure consumers are engaged by positively
responding to their value proposition – and can pay for in-game-purchases via localised
payment systems. This does not just suggest a mere localisation of games by means of
offering it in Indian languages but experimentation with a deeper proactive ‘culturalisation,’
which involves a closer examination of the assumptions to assess the viability of creative
choices in both the global, multicultural marketplace as well as in specific locales.45 In
light of these challenges, Victorian developers seeking market entry should consider
collaborating with a local partner, and preferably one that is willing to shoulder some of the
financial risks associated with market entry (which, according to some Victorian studios
who eyed the Indian market, is not always the case).
One example of a successful Victorian market entry into India is Big Ant's series of cricket
games, with Cricket 19 being heralded as the game that could help to break the ‘beautiful
game’ into e-sports and rival such giants as the FIFA series.46 With this title, Big Ant was able
to take advantage of the unparalleled popularity of cricket in India to promote Cricket 19 as
“the closest to the real thing that a cricket game has ever been.”47 Despite its huge popular
appeal, Cricket 19 also faced challenges. The game is only available for consoles and PC
and, with the PC version selling for as little as US$1, its monetisation relies on volume – but
that volume is constrained by the fact that its operating platforms constitute the smallest
segments in the Indian games market. Improvements in infrastructure offer a potential
solution to this issue. With the proliferation of 5G, India could leapfrog into cloud gaming
whereby remote servers stream games directly to a user's device. This, in turn, would at once
remove the barriers traditional consoles currently face and enable the playing of state-of-the-
art AAA games on low-cost devices (including mobile phones and set-top boxes).
45 Jon Fung and Richard Honeywood (2012) Best Practices for Game Localization (Toronto: International Game Developers
Association), p. 1. http://englobe.com/wp-content/uploads/2012/05/Best-Practices-for-Game-Localization-v21.pdf
46 Raunak Saha (2020) Could India be the Catalyst for Cricket 19 Breaking into eSports? Technosports. https://technosports.
co.in/2020/09/29/could-india-be-the-catalyst-for-cricket-19-breaking-into-esports/
47 Tristan Ogilvie (2019) Cricket 19 Review IGN. https://www.ign.com/articles/2019/05/29/cricket-19-review
18Priority Actions To capture these opportunities requires regular and meaningful exchange between the
industry sectors in both countries. Victoria is already actively promoting such exchanges,
in the form of (virtual and physical) inbound and outbound trade missions, roundtables,
webinars and conferences that inform about the state of the respective markets, promote
the expertise of the Victorian sector and build networks and people-to-people links.
Programs can be further developed to expose Indian stakeholders to the Victorian gaming
landscape and to conduct matchmaking (similar to how MIGW has been used to for
Chinese stakeholders, such as Tencent). Within these initiatives, Global Victoria, Creative
Victoria, and IGEA can all play leading roles.
1. Supported by market intelligence and targeted introductions via Global Victoria,
Victorian and Indian gaming companies should consider joint ventures or other
collaborative efforts that:
• Allow Indian studios better insights into the production pipelines of more
advanced games with international appeal via complementary Victoria-based skills;
• Enable Victorian studios to achieve scale through enhanced production
processes supported by Indian talent; and
• Assist Victorian developers in entering the Indian market by adapting/designing
their games with the help of local partners willing to co-invest.
2. Victorian education providers, with the support of Creative Victoria and Global
Victoria, should be encouraged to explore joint activities with Indian counterparts
aimed at increasing skills and understanding of the respective markets, including:
• Collaborations between education providers to assist Indian students to acquire
skills currently not available in India through overseas finishing schools, joint
coursework, education/industry collaborations and (paid) internships; and
• The development of research capacity and going beyond ‘traditional’ game
making and extending into VR and ‘applied games,’ where games technology is
used for purposes other than entertainment.
The Victorian gaming sector should be aware of the global competition to engage with
India. While Victoria does have the advantage of a long history of gaming culture and local
game developers producing internationally successful IP, a supportive state government,
and other pull factors such as lifestyle and a low Australian dollar, it still faces the challenge
of having to compete with other regions that, due to generous government incentives, may
be in a better position to take advantage of the opportunities on account of their scale,
greater experience with AAA development and the benefits of easier access to capital.
The Indian market has been promising tremendous opportunities for years now, and while
these will materialise eventually, they are open to any mature games industry. Ultimately,
the realisation of opportunities relies on well-informed stakeholders, business partners
aligned in outlook and realistic expectations.
19Appendix A
Australian Video Game Development: An industry snapshot FY 2018-19
Appendix A Australian Video Game Development: An industry snapshot FY 2018-19
Source: IGEA (2019d). Australian Video Game Development: An industry snapshot FY 2018-19.
https://igea.net/wp-content/uploads/2019/11/AGD-2019-Infographic-2pp-A4.pdf
Source: IGEA (2019d). Australian Video Game Development: An industry snapshot FY 2018-19.
20
https://igea.net/wp-content/uploads/2019/11/AGD-2019-Infographic-2pp-A4.pdfAppendix B Some of Victoria’s most significant and successful games studios:
Big Ant A leader of Victoria’s games sector and one of the most
influential studios, Big Ant has created games with a distinctly
Australian character including Rugby League Live 4, Cricket 19
and Big Bash Boom.
House House Makers of the 2019 hit Untitled Goose Game, House House
is also a winner of the Golden Joystick Awards, the Annual
D.I.C.E. Awards, the Game Developers Choice Awards, and the
British Academy Games Awards.
Firemonkeys One of Australia’s largest game studio, Firemonkeys is owned
by the global video games giant Electronic Arts (EA) which
continues to develop and support a range of globally popular
titles, including games for The Sims and Need for Speed franchises.
Wicked Witch A studio with a long history of success over almost two
decades, from original games like Puzzle Wiz to distinctly
Australian rugby, AFL and cricket games.
Hipster Whale One of Australia’s most successful game studios of the past
decade, Hipster Whale’s game Crossy Road has been played by
over 200 million players.
League of Geeks Makers of Armello, a game that combines three styles of play:
the tactics of card games with the strategy of tabletop board
games, combined with a character RPG system. League of Geeks
recently entered a deal with publishing label Private Division.
Mountains Mountains are the makers of Florence, a game that won
international awards for Best Mobile Game, including at the
Game Awards, Game Developers Choice Awards and British
Academy Games Awards.
PlaySide One of Australia’s largest independent game studios, Playside
work on original intellectual property and games developed
in conjunction with studios such as Disney, Warner Bros and
Nickelodeon.
Sledgehammer Games Sledgehammer Games is the Australian satellite studio of the
acclaimed developer of the Call of Duty games, one of the most
successful video games franchises of all time.
Tantalus One of Victoria’s oldest game development studios, Tantalus has
a 25-year history of working with publishers around the world.
Voxel Agents Voxel Agent’s The Gardens Between won Game of The Year
at the Australian Game Developers Awards award, the Apple
Design Award and the Game Changers Award at Google Play’s
Best of 2020 Awards.
21Appendix C Indian Games Industry
SWOT Analysis
Strengths Weaknesses
• Strong, fast-learning workforce with • Comparatively underdeveloped gaming
solid technical skills culture
• Long history of successful servicing • Lack of knowledge of the entire
international game development studios production pipeline of bigger budget /
• Government-driven support initiatives sophisticated games and corresponding
such as incubators shortage of skills
• Market difficult to monetise due to
small monetisation band
Opportunities Threats
• Massive market that is yet to realise its • Losing the status of cost effective
full potential outsourcing destination as countries
• A market that highly values local such as Cambodia catch up
content and culture but is yet to fully • Uncertainties regarding the legal
experience it in game form regulations of games
• Growing e-sports scene
• Growing acceptance of games in
general (including games seen as viable
career paths)
Victorian Games Industry
Strengths Weaknesses
• “Punching above its weight” • Lack of federal government incentives
• Comparatively mature gaming culture puts Australia at a disadvantage compared
and steadily growing industry to other (more) mature industries
• Strong international focus due to small • Australia’s conservative investment
local market and successful history landscape does not lend itself towards
creating globally appealing IP the kind of risk taking that is needed for
• Strong state support of game developers international joint ventures
and gaming culture (including MIGW) • Growth in industry is occurring from
• Talented English-speaking workforce, a comparatively small base and AAA
steady supply of (junior) talent, lifestyle production is only just returning (GFC
(Melbourne being one of the world’s severely diminished Australia’s AAA
most liveable cities), low Australian production as talent and expertise
dollar, advantageous time zone moved overseas)
Opportunities Threats
• Federal government incentives can help to • Without federal government intervention
fully unlock Australia’s / Victoria’s potential the Victorian games industry will
and push the industry towards AU$1 continue to lag behind competing
billion (with all the associated benefits countries, unable to take advantage of
such as a highly skilled innovation-focused international markets as well as more
workforce of 10,000 FTEs) sizeable industries in other regions
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