Nasscom lowers forecast for Indian animation & gaming

IT-BPO industry body Nasscom has revised its 2012 forecast for animation industry from USD 1060 million to 830 million and for the gaming industry from USD 1163 million to 1000 million.

Factors which accounted for the revision were the global economic downturn, the poor showing of animation movies at the domestic box office and the proof of concept/IP creation not being up to expectations.

A recently launched report by Nasscom and Ernst & Young pegs the gaming industry to grow at a CAGR of 49% to reach USD 830 million and animation to grow at CAGR of 22% to reach USD 1 billion by 2012.

Despite the lowered projections, the report projects growth in the visual effects (VFX) component of the industry from USD 65 million in 2008 to 174 million in 2012, while animation education is expected to grow from USD 67 million to 173 million in the same period.

Som Mittal, President, NASSCOM said "The industry in 2008 was estimated to gross revenues of US $661 million in 2008, up from US $364 million in 2006.

Farokh Balsara, Partner & National Leader, Media & Entertainment Practice, Ernst & Young says,"India's pursuit to establish itself in the global animation and gaming arena is facilitated by quality and lower cost advantage, large scale availability of manpower along with cultural and English language synergies. We believe that this combined with growing consumer demand from the domestic market would provide the required boost for the industry in India."

The entry of global entertainment majors leading to co-production of movies, end-to-end production out of India, original IP creation and growth in the domestic market have been the main triggers for growth in animation, the report says.

Major animation films and vfx-heavy films expected later this year and in 2010 include Eros' Aladin and Toonpur Ka Superhero and UTV Motion Pictures' Alibaba and the 41 Thieves.