The Reliance Webworld outlet in New Delhi's Tony New Friends Colony is unusually crowded on a hot June evening. It is hosting the zonal finals of a gaming competition organised by Reliance Infocomm. Sitting in front of flat screens, a dozen teenagers are busy playing games. Anirudh Sharma, 21, sporting long hair and a scant beard, is one of those playing FIFA soccer, a popular game. Sharma, who is preparing for the Common Admission Test is a gaming enthusiast and was a finalist in the India leg of another competition, the World Cyber Games, last July. His professional goal: setting up a gaming company after completing a post graduate diploma in business management from one of the Indian Institutes of Management.

Sharma's role model is Vishal Gondal, a game freak-turned-entrepreneur who founded Indiagames in 1999 when he was just 23. The Rs 67-crore Indiagames is the country's largest gaming company, employs 300 people, and counts global biggies like Tom Online, Cisco and Macromedia as investors. Gondal spotted the opportunity before most others (only the Bangalore-based Dhruva Interactive, set up in 1997, was in business then). But the gaming scene has become quite crowded now. Several dozen Indian companies are doing outsourced work for foreign game developers; some of them develop proprietary gaming products; and a few even sell branded games in India and abroad. Still, the country is still only a miniscule blip on the global gaming radar. According to market research firm acnielsen, the Indian gaming market is worth $50 million (Rs 220 crore); global revenues add up to $30 billion (Rs 1,32,000 crore). The US-based Electronic Arts alone had sales of $3 billion (Rs 13,200 crore) in 2004 and a market value of $20 billion (Rs 88,000 crore). Compare it to Indiagames, and you get the picture. So what's the big deal?

Mobile telephony! That's what's driving mass gaming in India. Telecom operators say subscribers are downloading 500,000 games every month from their GPRs or WAP portals (Reliance through its R-World); this is likely to cross 1.5 million by the end of the year. "Mobile phones are making gaming a mass market phenomenon," says Pravin Pinto, GM (Marketing) at LG's CDMA Handset Division. Nasscom estimates that the Indian gaming industry will tot up revenues of $500 million (Rs 2,200 crore at current exchange rates) by 2010. In much the same vein, research agency In-Stat/MDR says the Indian mobile gaming market alone will touch $336 million (Rs 1,478.4 crore) by 2009. "The growth of mobile gaming in India has attracted publishers, developers, animators, musicians and content providers, and is also stimulating the development of innovative business models," said Clint Wheelock, Director of In-Stat/MDR's wireless research group.

"Differentiation is taking place in the mobile games space; half the games downloaded is serious, while the other half comprises casual games" GOPALA KRISHNAN CEO/Mobile2win

It can be argued that these numbers are virtual, at least for the moment. But there's a lot of real action on the ground as well. Says K. Rajesh Rao, CEO, Dhruva Interactive, who worked with Microsoft Gaming Studio for an Xbox game, Forza Motorsport: "Global biggies now seek us out and want to do business with us. It's a nice position to be in." Rao, a computer science engineer from Sweden's Royal Institute of Technology, started his company with a bank loan, and remained cash-strapped till 2001 when Atari (a global gaming company) founder Eric Moffet came in as an angel investor and ploughed in $500,000 (Rs 2.35 crore at the exchange rate prevailing then). Dhruva is cash-positive now, and is looking for venture capital to scale up operations. For starters, it has acquired Project Zoo, a gaming consultancy company in the UK. "This gives us an entry into the UK and EU markets," says Rao, who's also looking for acquisitions in China, Russia and East Europe.

"We do not take up outsourcing jobs. We develop and publish our own games" VISHAL GONDAL Founder/Indiagames

But the gold standard of the Indian gaming industry is Indiagames. Gondal started with $750,000 (Rs 3.2 crore in 1999) in funding from Infinity and IL&Fs. But his big moment came in December 2004, when Tom Online, China's largest gaming company (with revenues of $125 million or Rs 550 crore in 2004), picked up an 80 per cent stake iin Indiagames for $18 million (Rs 79.2 crore). Subsequently, in April 2005, networking giant Cisco and multimedia software maker Macromedia bought a combined stake of 18 per cent for $4 million (Rs 17.6 crore) from Gondal and Tom Online. It brought Gondal's stake down to less than 20 per cent, but he isn't worried. "We needed the investments to take the company to the next level," says Gondal, adding that Indiagames will not take up outsourcing jobs anymore; from now on, it will only develop and publish (industryspeak for marketing) its own games. The company already sells mobile games to 135 telcos in 65 countries and is now readying to exploit synergies with its strategic partners.

"Global biggies now seek us out and want to do business with us. It's a nice position to be in" RAJESH RAO CEO/Dhruva Interactive

The outlook is definitely bullish. If you still have any doubts, sample this: Reliance Infocomm has got its foot into this door. In 2001, it set up Paradox Studios, which started as a developer of Web-based games, and is now aggressively moving into other platforms like PCs and mobiles. The Mumbai-based Paradox has 65 mobile game titles, 30 online titles and three pc games. Reliance Infocomm's strategy is simple: develop gaming applications for its nationwide broadband network and for its 10-million-plus mobile subscriber base. Informs Sarup Chaudhury, Head, Reliance WebWorld: "One-fourth of the four lakh registered users at the 200-odd WebWorld outlets are gamers." The company currently offers games published by global gaming giants like Electronic Arts and Activision. "The opportunity here is in developing games for the Indian market with local content," says Anurag Khurana, 31, CEO of Paradox.

It doesn't require a rocket scientist to see this opportunity. According to telecom operators, India's mobile phone subscriber base is expected to touch 180-200 million by 2007. Little wonder then, almost all the local players-from Indiagames to Mumbai-based Mauj (part of Shaadi.com) to Mobile2Win (part of Alok Kejriwal's Contest2win.com)-are focussed on this segment.

Bollywood hits and cricket are the two most popular game themes. Mobile2Win's game based on Sholay (it shares revenues with the movie's producer) is a big hit, with 70,000 downloads since its launch in November 2004. Now, every film producer wants to sell gaming rights for licence fees of Rs 5-35 lakh. "On the mobile gaming side, India (which accounts for five per cent of the global market) is almost at par with the global game makers," says Khurana.

But will India ever have gaming companies like Electronic Arts or id Software, which make multi-million dollar console games? Unlikely, at least in the foreseeable future. Developing a console title can cost $30-50 million (Rs 132-220 crore). Not many companies have the wherewithal to do this (but Paradox has developed a pc title). "It's a big issue," says Mohit Anand, Senior Manager, Microsoft Home Entertainment Division.

But Indiagames' Gondal is optimistic. With millions of dollars in funding, he can afford to be. He can (and does) aspire to become a console game maker. But can another 20-something gaming enthusiast walk in and start a company that goes on to become a winner? Who knows? It's a funny game.