Social gaming is a  relatively new phenomenon in India and is a concept which involves users to play online games. Social gaming has gained popularity because of the enhanced social interaction that it brings along, which is lacking in a standalone game like Solitaire.  Social gaming has enhanced its audience because most of the games these days try to replicate day to day issues and bring together Indian audiences by blending local nuances into the gaming environments. The results and rewards are real time and therefore, the concept of gaming is continuously evolving.

Key Growth Drivers

Indeed, social games that are played on social networking sites with a group of friends are fast becoming the most used online apps among the 52 million internet subscribers in India. This has brought domestic game companies with their own popular portals, like Zapak, Indiagames and Games2Win, into the social networking scene. Industry players, in fact, believe social gaming will be one of the key drivers for growth of gaming in India.

• At present, of over 12 million Indians on Facebook, about 7 million reportedly play social games
• Globally, at least half of the 500 million Facebook users are likely to pick up on social games within two years.
• Also the 3G technology will step-up mobile gaming from single-player Java downloads to multi-player, social gaming which would be powered by high-speed data transfer capabilities.
• With the advent of affordable and high-end smart-phones, mobile and social gaming have already started creating noticeable ripples with India’s mobile gaming industry standing at Rs 541 crore, which is 4.56 per cent of the total VAS revenue of Rs 11,860 crore, according to a report in Hindustan Times
• The above share would get a further boost with the launch of 3D and MMOG (massively multiplayer online games) mobile games and enhanced QWERTY keyboards to improve the end-user experience.

While globally China and Japan are considered as big social gaming markets, India too have joined the bandwagon as emerging markets. This is because of the burgeoning economy of India, consumers who now have the potential for virtual good consumption. This thought is reiterated by Zynga’s Country Manager for India, Shan Kadavil in an interview with Financial Express

India’s consumer spending patterns are increasing, making the potential for the sale of virtual goods in social games, very high. We are very excited to offer Zynga games to Indian users given this rapid growth and market potential.

His remarks come in the wake of Zynga considering India as its first major international expansion market. Zynga gets 90% of revenue from the sale of virtual goods as per the report from Reuters.

Current Scenario

Indians are now not only investing time in online games but also money. Be it the famous ‘FarmVille’ on Facebook or the ‘T20 Fever’ of Indiagames, the culture of spending real currency in online games is picking up. The emergence of a substantial online community in India and its spending power also led PayByCash to make its Ultimate Game Card available in India.

In spite of the growth there’s no denying of the fact that a major chunk of social gamers continue to play without paying. Indian players are believed to be more likely to earn virtual currency through services like Offerpal Tasks than direct payment and only a minority purchases virtual goods and other in-game content.

Business Model

As a business model, social games are now moving towards consumer revenue generation that scales massively and has very high profit margins. By improvising game design and cultivating a better understanding of conversion trigger points, social game operators will gradually be able to increase the rate at which they convert free gamers to paying customers and also how much these customers spend

In recent times, the gaming industry received a blow due to the global economic downturn, end to end skill sets not being developed in the gaming industry and IP rights issue. But the situation has been improving.

Rajesh Rao, CEO, Dhruva Interactive while speaking at the release of NASSCOM Animation & Gaming Report 2008 -2009 expressed similar sentiments

In the past few months, all the players of this space have had their fair share of challenges. But what has been really interesting is the multi-platform takes off in the gaming space in the domestic market. We have seen the various gaming platforms evolve simultaneously. Also the gaming services industry has benefited from the economic downturn in a way, as the prices of game development have gone high in the west, which has in turn resulted into increased workflows to India.

The gaming industry is expected to change with new emerging players in the market and international gaming giants showing keen interest in the Indian market.

Note: This post is part of our Student Series that will feature perspectives from students across management institutes on Social Media

Views of authors are personal, and do not represent views of IndiaSocial or its partners.