Video Game Market Accelerates In India

India has never been a big market for video games, but over the past few years, interest has been picking up and the growth rate is showing a steeper curve. This growth, iSuppli analysts say, is attracting players in the gaming field to India. India’s video-game console market is expected to grow to $125.4 million by 2010, rising at a Compound Annual Growth Rate (CAGR) of 75 percent from $13.3 million in 2006. In April, Sony Corp. launched its PlayStation 3 gaming console in India at a price of $980 for the 60Gbyte model with an assortment of 12 gaming titles from publishers like Electronic Arts, Sony Computer Entertainment and Namco Bandai, distributed in India by Milestone Interactive Software Ltd. Sony aims to sell 10,000 PlayStation 3 consoles in the Indian market by the end of 2007, despite its steep price tag. In the initial stages, Sony already has sold 1,200 units in the Indian market and soon will initiate a campaign to promote the product. PS3 will have to compete against Microsoft Corp.’s Xbox 360, which has a lead in the market due to its earlier launch in India. Microsoft launched the Xbox 360 in the Indian market in September 2006 and has since extensively marketed it. The company also launched a gaming title based on cricket, called “Yuvraj Singh International Cricket 2007,” tailoring its titles to Indian interests. “The console gaming segment is not very sizeable in India. However, future growth expectations and consumerism are prompting companies to establish themselves in India,” said Ashish Thakre, associate analyst with iSuppli. While Sony intends to garner a share of this growing market, its products are expensive for a price-sensitive Indian market. The Xbox 360 is available for around $600, a major price differential compared to its competitor. Sony has chosen not to launch a 20Gbyte version in India for now, which would have been less expensive. Gaming consoles attract high duties, which lead to higher prices. Duties comprise approximately 35 percent of the product price in India, limiting video-game-consoles’ legal sales and promoting the gray market. It still remains to be seen if Sony can repeat its past successes in the Indian market with PlayStation 1 and 2.