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NASSCOM's Animation and Gaming India 2007 Wraps Up in Hyderabad

On Jan. 10, 2007, NASSCOM, the premier trade body of the IT software and services industry in India, closed its two-day NASSCOM Animation & Gaming India event in Hyderabad.

NASSCOM also released the annual report on the Animation and Gaming Industry in India -- 2007. Key findings of the report include an expected CAGR for Indian Animation industry at 25% over 2006-2010 and a CAGR of 72% over 2006-2010 for gaming.

Speaking at the inaugural session, Kiran Karnik, president, NASSCOM, said, "Animation and gaming in India has taken off in a big way in the past 2-3 years owing to recognition of India's IT expertise and creative skills, entrepreneurial drive of companies and last but not the least, recognizing this as a potential growth sector at the right time. In addition to inherent factors like creative skills and manpower availability and cost advantage, external factors like growing maturity of animation studios, increase in number of co-production ventures, development of IP, and the attractive domestic market opportunity have immensely contributed to this industry's growth.

To ensure further growth and an increase in India's share in the fiercely competitive global market place, we need to focus our attention to factors like external investment and specialized training. The industry has the potential to offer significant opportunities to investors, companies and the government for which the industry needs human capital development and government policy support. A concerted effort led by the industry, in close association with the academia and supported by the government in terms of fiscal incentives, financial, academic and infrastructural support is critical to address the issue emphatically," he added.

Speaking at the inaugural session of the Summit, B Ramalinga Raju, founder/chairman of Satyam Computer Services and chairman, NASSCOM said, "The Indian industry has typically been export led, this is also evident from both the workforce breakup into outsourcing led and domestic led projects, and the fact that 70% of the revenues for this sector come from exports. However, we are seeing the gradual trend of increasing focus on domestic market and domestic demand. Another trend which is an indication of the market drivers is introduction of special effects in Hindi, regional and animated films - this is also providing an impetus to increasing levels of interest in animated movies in the domestic market."

Key Highlights of the Report

Global Market* Global animation market (demand perspective) was estimated at USD 59 billion in 2006, estimated to reach $80 billion by 2010; Global market for animated content and related services (developer's perspective) is estimated at $25-26 billion and is forecast to cross $34 billion by 2010.* The worldwide gaming market (demand perspective) stood at $21 billion in 2006; and is expected to reach $42 billion by 2010, growing at a CAGR of nearly 19% over 2006-2010. Worldwide gaming content market (developers' perspective) was estimated at nearly $7 billion in 2006 and is expected to cross $13 billion by 2010, a CAGR of 17% over 2006-2010.

Indian Market* Indian animation industry is forecast to reach $869 million by 2010, representing a CAGR of 25% over 2006-2010.* The Indian gaming industry was estimated at nearly $48 million in 2006; and is expected to cross $424 million by 2010, representing a CAGR of 72% over 2006-2010* Currently 300 animation companies employ approximately 12,000 people in India. Industry estimates indicate that nearly 3,000 freelancers also work in the industry. To be able to maintain its share of the global pie, and grow it, there is a need for focused human capital development for animation and gaming sectors, and for Government policy support in the Indian industry.* Case for Focused Human Capital Development for Animation and Gaming -- The number of professionals employed by the Indian animation industry in 2006 is estimated at 16,500. This figure is forecast to increase at a CAGR of 14-15% and exceed 26,000 by 2010. The key constraint is the growing demand-supply gap in manpower availability that is expected to restrict the Indian animation industry's growth to $869 million against its potential of exceeding $1 billion.* Case for Government Policy Support for the Indian Industry -- The broadcast (including animation) industries in countries such as France, Singapore, China, Korea, Canada and Philippines; have grown with the help of specific policy support extended by the local governments. The support offered has ranged from assistance in manpower development, infrastructure provisioning, direct and indirect investments, to promoting industry recognition.

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