The best way to improve your chances of success in India is to operate in India.
That was the key message from a panel at India Game Developers Conference in Hyderabad yesterday, in which investors discussed trends and opportunities when it came to funding games ventures in the country.
Courtside Ventures partner Deepen Parikh assured attendees that it is not imperative to know everything about India’s games market before investing. In fact, he said it’s “okay to be a little naive about the market,” drawing on his own experience first investing in major Indian games publisher Winzo.
Winzo first reached out to Courtside in May 2020, during the height of COVID-19, and the investor struck up a partnership with the publisher within just a few months – a deal that has been greatly beneficial, Parikh said.
Since lockdown measures were in place, the agreement was arranged after a number of video calls, and Courtside hired both an accountant and a law firm based in India to handle the deal. Reflecting on his dealings with Indian businesses since, Parikh said: “There is no replacement for being on the ground.”
“[India] is multiple countries in one,” he said. “If you’re not here regularly, and you don’t understand the differences between what’s happening in Bangalore, Delhi, Mumbai, as well as a lot of the smaller cities and towns, you’re going to miss out on a lot of the biggest opportunities.”
“I don’t think you can build a market leader that dominates India from somewhere else. You just don’t have the understanding of what consumers like”
Phylicia Koh, Play Ventures
Play Ventures general partner Phylicia Koh made a similar point while explaining that the opportunities for video games in this market can be divided into two categories.
“You can make games in India for the rest of the world, although you’ll face the same challenges as everybody else,” she explained. “Otherwise, you can make games in India for India, which is a really really big market, [and] one that’s young, has a significant population of folks who are 30, 20, or even younger. There are a lot of opportunities and tailwinds that exist in the Indian market that aren’t necessarily found all over the globe.
“And I don’t think you can build a market leader that dominates India from somewhere else. You just don’t have the understanding of what consumers like, what their habits are, even something like payments. Someone else will look at this market and not understand the opportunities as someone here would.”
Earlier this week, venture capital fund Lumikai released its latest annual report on the Indian games market, showing that it generated $3.8 billion in the last fiscal year – projected to grow to $9.2 billion by the end of FY2029 – and is home to 514 million players.
GamesIndustry.biz spoke to Lumikai about how player behaviour is shifting in India. The market has historically been dominated by real-money gaming but now sees millions more players spending on free-to-play titles – especially in the midcore segment.
Parikh echoed this discussion during the panel, although he clarified that the growing opportunity to monetise games does not make doing so any less challenging.
“We can no longer think about India as a place where it’s just volume and it’s unmonetisable, but it’s volume where you have to get really creative in how you’re going to monetise,” he explained. “We’re starting to see a lot of developers who are thinking about different monetisation methods.
“It’s not a rinse and repeat thing here – you cannot take whatever has worked elsewhere and replicate it here. The cultural nuances are too different, everything is so different you have to build for India. That’s where we’re trying to get smarter. We’re looking at where we can see differentiated business models that are specific to India, and how those are going to scale towards the next generation and take advantage of 500 million-plus gamers.”
“If you’re not here regularly and don’t understand the differences between what’s happening in [the different cities], you’ll miss out on the biggest opportunities”
Deepen Parikh, Courtside Ventures
Andrea Yang, investment associate at Makers Fund, also alluded to the report, noting that while research like this may forecast growth, games companies “never know the nuances of why and how.” Again, operating locally is the key.
“You really have to be here to talk to the people who make the games, but also the players, so you can understand the motivations behind why a game is successful, as well as the retention and potential monetisation,” she said.
She offered the example of cricket. Having previously lived in Australia, Yang said she “wasn’t completely new” to the sport and why it’s popular but added there’s “a whole different level of passion” for it in India.
“You don’t really understand that unless you come to meet with the people here, as opposed to just going ‘oh, cricket games do well there’ but not assuming too much beyond that. Being on the ground, especially for a huge and complex market like India, is hugely important.”
