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| Mohan Bhupatiraju: The game
is on |
It's another lucrative
outsourcing market where the twin India advantage of quality resources
and lower costs comes into play. Console gaming as an industry
is estimated to be worth $42 billion (Rs 1,84,800 crore) globally,
with game publishers accounting for roughly $12 billion (Rs 52,800
crore) of that. One game development services company attempting
to address that market is the Hyderabad-based Gameshastra. "We
are the only company in India with a clear focus to offer a full
suite of services-from game development and programming to game
art and animation and testing and quality assurance,'' says Prakash
Ahuja, CEO, Gameshastra.
Gameshastra has set up facility to seat some 400 people on a
two-shift basis. The company currently employs around 180 people
and hopes to reach over 400 by the end of 2007 calendar year.
"We have allocated $5 million (Rs 22 crore) for the first
round of investment and will invest an additional $20 million
(Rs 88 crore) by the middle of next year,'' says Ahuja. Gameshastra
has a strategic relationship with the us-based Activision-which
Mohan Bhupatiraju, Director and co-founder, describes as the second
largest gaming company in the world (after Electronic Arts)-and
is working with it on multiple projects.
One of the unique features in the company is its console gaming
lounge which, according to Bhupatiraju, "has been created
to check out the passion of new recruits for games." If you
plan to build a game, make sure you play it well first!
-E. Kumar Sharma
Content
is King (Kong)
The games have only just begun for FXLabs.
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| PC gaming: The local content
is much in demand now |
Want to play games with Hrithik
Roshan or Aishwarya Rai? The Hyderabad-based FXLabs Studios, a provider
of game development and outsourcing services, has signed an exclusive
agreement with Yashraj Film Studios to develop a pc game based on
the popular action thriller movie Dhoom 2. At the time of writing
FXLabs was close to concluding a deal for another big Bollywood
title.
The focus will typically be on action films/thrillers, and FXLabs
hopes to get rights for five major films (three from Bollywood
and two popular regional films).
The Dhoom 2 game will hit the market in October. "We want
to be the top publisher of Indian content and be the first to
make games from Indian studios for international markets,'' says
Sashi Reddy, founder of FXLabs (he's also the promoter of independent
software testing company Applabs).
Reddy has drawn inspiration from the Chinese gaming market,
which is largely driven by local content. According to FXLabs
CEO Tony Garcia, the Internet Society of China estimates that
the country now has 78 million internet users. Of these, an estimated
40 million-more than half-play online games and bulk of these
are driven by local content. Overall, 43 per cent of gamers in
China play online. Taken as a whole, estimates are that the total
video game revenues in China from all sources, including online
games, totalled $350 million in 2005. Estimates also project this
revenue to grow to $1.5 billion (Rs 6,600 crore) by 2008.
In India, where pc penetration in households is growing at 30
per cent year-on-year, the potential for entertainment software
is yet to be exploited. Currently, product offerings in the country
are limited to games from the US and other foreign markets with
little localised content. This coupled with high prices has made
the adoption curve somewhat slow. fxLabs intends to market the
games at prices that would be at least 40 per cent lower than
those of imported games. "With the Dhoom 2 game, we intend
to be a first mover in this potentially huge market. Just like
in China we believe that games based on local properties have
the best chance of success,'' says Garcia. The promoters of the
company have already invested $5 million (Rs 22 crore) in the
company (including investments from Suresh Productions, a leading
film production company); by March 2008 (at the end of the first
year), FXLabs hopes to have revenues of $6 million (Rs 26.4 crore),
with $4 million (Rs 17.6 crore) coming from games and the rest
from outsourcing projects. The company currently employs 120 people
in all and Garcia comes with 25 years experience in the video
games business. He has worked with companies like Sega of America
and LucasArts and was amongst the founding team of Microsoft's
games division, where he spent six years.
After leaving Microsoft, Garcia joined Electronic Arts where
he was involved in developing games such as Need For Speed and
FIFA Soccer. To be sure, it's not just Bollywood that FXLabs will
focus on. Before Dhoom 2, the company will launch its first game
called Inferno by April and, by July, a game based on Archie's
comics will hit the market. "We hope to release one game
every quarter and tie up at least one big property every year
for the global market," says Reddy. Surely, the game for
him has just begun!
-E. Kumar Sharma
Hidden
Treasure
General insurance firms get a shot
in the arm.
Kill two birds with one stone.
That seems to be the intention behind the government's proposal
to insert an enabling provision in the GIBNA (General Insurance
Business Nationalisation Act 1972) that will allow the four state-owned
general insurance companies to dilute their equity holdings in the
market. If this proposal translates into action, these companies,
which were nationalised in 1973, get a chance to gain some muscle
by roping in public sector banks (PSBs) as strategic partners. At
the same time they would have eliminated the possibility of new
competition from such PSBs, many of whom are mulling solo forays
into the general insurance space. "The new provisions will
allow us to go in for a strategic partner or invite public participation
through the IPO route," says M.K. Garg , Chairman & Managing
Director, United India Insurance Company.
A foothold into the state-owned general insurance sector is
clearly attractive for PSBs, what with the four companies-New
India Assurance, National Insurance Co, United India Insurance
Co, and Oriental Insurance Co-raking in an annual premium of almost
Rs 15,000 crore (see A Peek Into the Goldmine). The insurance
companies for their part will get an opportunity to leverage the
banks' pan-India networks. "We will get access to branch
infrastructure of banks and they will get an entry into the fastest
growing non-life insurance business," says Garg.
According to market estimates, the value of each state-owned
general insurance company is well over Rs 10,000 crore if you
take a multiple of three over the gross annual premium underwritten.
However, these companies are slowly but surely losing share to
new private sector players. In the last six years, the nine-odd
private sector players have cornered close to a fourth of the
market.
-Anand Adhikari
Different
Roads
When there's Maharashtra and TN,
why go to Singur?
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| Anand Mahindra: Heading south |
Mahindra & Mahindra
(M&M) clearly loves Chennai. The group first came to Chennai
with Ford (the joint venture is now defunct) in 1995, many years
later it set up India's first special economic zone (SEZ) just
off the state capital, its time share resorts business is headquartered
in Chennai, and a development centre of Tech Mahindra is located
here. So, perhaps it wasn't surprising when last fortnight the
troika of M&M, Nissan and Renault announced that their Rs
4,000 crore car factory would be located in Chennai. Before the
M&M-Nissan-Renault venture, a number of other auto majors
had zeroed in on Tamil Nadu. These include BMW (investment committed:
Rs 180 crore), Hindustan Motors in a technical collaboration with
Mitsubishi (Rs 320 crore), and Hyundai (Rs 4,300 crore), while
Ford's investments are set to touch Rs 3,000 crore. Yet, Maharashtra
has been more successful in attracting auto makers. A Tata-Fiat
JV (with Rs 4,000 crore of investment), General Motors (Rs 1,400
crore), Volkswagen (Rs 1,400 crore), Skoda (Rs 250 crore) and
Mahindra's commercial vehicle venture with International Truck
& Engine Corp (Rs 2,500 crore) are all coming up in the western
state.
So with Maharashtra and Chennai attracting most auto makers,
you have to wonder why are the Tatas hell-bent on putting up their
Rs 1,500 crore mini-car project in Singur in West Bengal, where
land acquisition is proving to be a nightmare? Says Debasis Ray,
Head, Corporate Communications, Tata Motors: "Like other
states where we could have set up the plant, the West Bengal government
too decided to provide land to be acquired by the government and
match the incentives. The state government was keen on the project
because of the rapid industrialisation effect it would bring about."
But wouldn't building a plant in a proven auto hub be more hassle-free?
-Nitya Varadarajan
Pulp
Traction
Coke is set to roll out its orange juice drink,
Minute Maid.
Driven by the growth of modern
trade and proximity to its manufacturing base, Coca-Cola picked
Hyderabad recently to launch its popular orange juice drink "Minute
Maid'' in India. It begins its national rollout with the south.
Coke is currently busy targeting 13 million young adults in the
three southern states of Andhra Pradesh, Karnataka and Tamil Nadu
to whom it plans to give away 5.5 lakh bottles. The drink is to
be bottled at the company's plant at Chittoor in Andhra Pradesh.
For Coca-Cola, Andhra Pradesh is among the top three states in the
country in terms of revenues. The other two are Punjab and Delhi,
perhaps not in that order. The fruit pulp is being imported from
Florida and the juice concentrate from Brazil (though there are
plans to locally source the fruit). The plan now is to make the
juice available through 25,000 outlets in the three states in the
first two months. Minute Maid will be available in pet packs of
400 ml and 1 litre, priced at Rs 25 and Rs 60 respectively.
Packaged juices market is valued at Rs 1,000 crore and forms
10 per cent of the total juice market in India. Minute Maid would
have to take on brands like Tropicana, and Real Activ in the Indian
market. Globally, the brand is well established, having been launched
in 1945 before Coke acquired it in 1960. Says Venkatesh Kini,
Vice President (Marketing), Coca-Cola India: "The USP is
that it is the first juice drink (to be launched in India) with
a real orange pulp. So, unlike most juices the taste is that of
both the juice and the pulp.'' And that's no pulp fiction.
-E. Kumar Sharma
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