Over the years, the Animation & Gaming industry has seen the entry of many global majors who have tapped into India’s talent pool for offshore delivery of services. While initial work offshored to India was low end and support oriented, India is now seen as a leading destination for high end, skill based activities. As a result, there has been an uptake of activities around co-production of animation movies that involve participation of Indian studios across the value chain. Increased availability of latest games at lower price points and newer pricing models has made gaming an attractive industry in India. However, the industry being in a nascent stage of development, it is critical to nurture this industry for it to be able to compete at a global scale.

Key Highlights during FY2011

• In 2010, the Animation, VFX and post production industry witnessed a growth of 17.5 per cent over 2009 to reach Rs 23.6 billion. The growth was largely led by the VFX segment which grew by 42 per cent and post production which grew by 17 per cent* 
• In  2010, the Animation industry grew by 10 per cent to touch Rs 10 billion*
• Domestic companies have started to focus on improving quality and the creation of original IP, which can be leveraged in terms of merchandizing and broadcast revenues.
• New business models have evolved in the marketplace, to successfully tackle current challenges such as piracy, lack of effective distribution etc, which has led to increased market penetration, and heightened awareness about the animation and gaming industry.
• Consolidation in the industry will continue in the coming 3 to 5 years, with smaller facilities likely to get absorbed by larger players and the studio model expected to gain dominance in India.
• While the growing demand for television content continues to be a key driver for growth of the animation industry, the demand supply issue for trained talent still exists, though vocational programs are being introduced along with regular curriculum to offset this demand.
• Recognizing this industry as a significant user of technology, and to play a seminal role in developing India’s domestic media and entertainment industry, NASSCOM formed  NAGFO (NASSCOM Animation & Gaming Forum) to catalyze the growth of the industry and also establish an interface with the government. 

(*Source: FICCI-KPMG Indian Media and Entertainment Industry Report 2011)