Jaldi 5 with Manish Agarwal: Gamification is next big thing

07 Dec,2012

Reliance Entertainment Digital, the digital arm of Reliance Entertainment is a cluster of leading multi-brand consumer digital company in India. Today, the company’s business encompasses digital entertainment – that’s gaming, VOD and e-commerce across all prominent platforms such as online and mobile its portfolio comprises dynamic brands and companies like Zapak Digital Entertainment, which operates three verticals: Zapak Solutions, Zapak Online & WAP Portal and the newly christened Zapak Mobile (earlier known as Jump Games), Big Adda and BigFlicks Pvt Ltd. Cumulatively, the Reliance Digital business has over 20 million satisfied consumers across all digital platforms.

 

MxMIndia interviewed Manish Agarwal, CEO of Reliance Entertainment Digital, and spoke to him on a variety of issues around digital entertainment and gaming in particular.

 

01. In many ways the fact that the Reliance group had invested in Zapak in 2005 had indicated to the world that there is much potential in the gaming business. As you look back seven years, would you say, the investments have been worth it? Is there enough RoI?

Reliance Group remains committed towards its belief that gaming would be a great driver for entertainment for millions of Indians in high-speed-always-connected-broadband era. The group invested in creating India’s first gaming brand and today Zapak is synonymous with gaming. Zapak had segmented market as casual gamers and hard-core gamers and had provided different offerings to both segments. Zapak is the largest casual gaming destination in India in terms of users as well as revenues. However, Zapak had expected the gaming to grow exponentially via MMORPGs among hard-core gamers as was (and is) the case in Korea, Japan and China and had invested heavily in building gaming cafes to enable hard-core gamers to become part of game cult existing in east Asian countries. However, owing to missing link of high speed always-connected-broadband infra in India, hard-core PC-based paid gaming culture has not taken off and Zapak had to re-caliberate its strategy and thinking that MMORPGs will drive the gaming in India. However, the brand name, learnings and highly skilled set of the ONLY team which has the experience of developing, distributing and monetizing casual as well as high-end games puts Zapak in an unique position to exploit exploding mobile gaming market not only in India but compete globally. The recent success of F1 2011, Real Steel, Ben 10 and ICC WT20 games in India and abroad give us confidence that Zapak would be one of the most successful company from India in gaming space worldwide.

 

02. We are a country of over a billion people. Sale of digital devices is growing exponentially. Why do you think has the domestic consumption of gaming not grown much in India?

If one looks at past growth of gaming culture and gaming business worldwide, it has either happened on consoles or on high-end PCs. Consoles and high-end PC would cost more than Rs 50k which is either beyond the purchasing power of Indian or falls in the space of “indulgence”. The high cost of the devices coupled with poor broadband and lack of good devices has resulted in the generation of 30-plus Indians being essentially of non-gamers. However, things are changing very rapidly with the proliferation of smarter hand held devices at an affordable price, generation of Indians between 3-25 years is busy in playing variety of games on their hand held devices.

 

This explosion in lead by “snacky and snappy” nature of gaming, making it the best entertainment option for ‘timepass on the go’. 100 million mobile internet and with forecast of mobile internet users growing to 300 million by 2015 offer a great opportunity for players like Zapak to innovate and deliver good quality games to the Indians and also experiment with localization as there is a high probability of creating a scalable & profitable business model on mobile gaming in India.

 

03. In terms of production of games for the overseas market, where is the growth coming from? And what are your projections?

North America is a 5 billion USD market for mobile gaming followed by Japan which is 2 bn USD, China which is 1.2 bn USD and Korea is a 0.9 bn USD market. The mobile gaming market has been growing at a rapid pace across all these markets and market has witnessed true democratization of mobile gaming distribution resulting in new studios emerging with winner every day. The potential revenue per good quality AAA game is upwards of 100 million USD. However, the market is ultra-competitive with ‘winner take it all’ being the reality.

 

Given this scenario, it is imperative for a game development studio like us to employ the best of the global talent and create processes and systems which reduce probability of failure. We have consciously adopted strategy of partnering with large Hollywood studios and known IPs like F1 to avoid risk of being lost in 250k games on iTunes store and 800 games getting uploaded every day. Our strategy of having known IP coupled with good quality game has been a demonstrated success with Real Steel and F1. We are looking to augment our slate for next year by partnering with developers worldwide and have very strong lineup of 8-10 large IP-based games for next year. We are confident of hitting double digit million USD revenue with this slate and would like to keep fingers crossed for a massive hit which one cannot predict.

 

04. We’ve seen some restructuring at Reliance Digital with Jump Games being rechristened Zapak Mobile. What are your plans for the next year?

Zapak is synonymous with gaming in India and Jump Games is relatively unknown brand outside India and is a B2B brand in India. As we are looking at aggressive growth in next 2-3 years for the market and for ourselves, we would like to build brand familiarity for one single brand across consumers and stakeholder so that we are able to stand out among the huge clutter of gaming companies already existing outside India and would happen in India. Choice was to build Jump or Zapak outside India and given that Zapak is already synonymous with gaming in India, we decided to consolidate the gaming business under Zapak. Zapak is the only company which offers gaming experience to consumers on all touch points and offers advertisers solutions across all touch points. Zapak aims to become largest gaming company in India by revenues, consumers and IPs if it is not already.

 

There has been some quiet on the Big Adda front?

Big Adda is a horizontal e commerce platform and since e commerce in India is still gross margin negative business, we have taken a conscious call to say no to invest in consumer acquisition and wait for e-commerce to mature in this country before we re-start the investment. We are running a full fledged e-commerce service and maintaining its scale as and when we see an opportunity to create profitable business.

 

And with Big Flicks – are broadband speeds the stumbling block for its growth?

Big Flicks is the first subscription-based on-demand movie streaming service and we have over 2000 movies across languages with distribution reach across all hand held platforms, pc and smart TVs. We believe that there is huge latent demand for movies on demand service at home as well as on-the-go. However, internet speeds are the only thing which inhibits the subscriber base in India to outshine the Netflix subscriber base in US. We believe that high-speed always-connected broadband is closer to reality now than in past and Big Flix is uniquely poised to exploit the inflexion point in broadband growth.

 

05. Any trends that you could forecast for us – in terms of what we should look forward to in the next year?

Micro-transactions via mobile carrier billing coupled with change in revenue sharing by telco in favour of developers and service providers would change the shape of VAS industry in this country. It would result in innovations in content, give a fillip to players who understand pull-based direct-to-consumer services and would lead to growth in data driven marketing thinking.

 

Gamification would be the next big thing in digital across enterprise and consumer digital marketing as consumers would like to have fun rather than follow regimentation. Zapak has created advergaming in India five years back and we have evangelizing Gamification to Indian advertisers as this has already caught fancy of advertisers in west and as per Pew research report, gamification is going to be biggest trend in advertising by 2015.

 

How is the digital entertainment business doing in terms of talent? Are you getting the right kind of people to join in?

Talent remains biggest concern on the game development front. The lack of good quality game designers, art directors and producers make it extremely difficult to compete in ultra-competitive mobile gaming space outside India. Likewise, finding talent which can think beyond performance and think of highly engaging 360-degree digital solutions remains a challenge. A business savvy ‘digital baby’ is tough to get hampering the growth of companies like Zapak which thrive on offering cutting edge gaming solutions to advertisers.

 

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