December 29, 2022: By annually downloading 4.8 billion games, Indians have made this world’s largest market for mobile gaming (Data.ai report).
As the world’s second largest consumer of entertainment, India gobbled Rs 83 billion worth of animation and visual effects products in 2021, admittedly a lean year due to Covid. ( Statista report).
Being among the world’s biggest consumers in any sphere is good – as a record. But it doesn’t put money in the national pocket. That comes when a nation of big consumers morphs itself into a nation of big creators.
And that presumably was the reasoning behind the commitment in the Union Budget of 2022 to the creation of a national task force for “Promotion of the Animation, Visual Effects, Gaming and Comic (AVGC) sector, with the target to capture 5 percent (equal to $ 40 billion) of the global market by 2025, and in the process generating 1.6 lakh jobs every year.
Words turned to deeds by April this year when the task force was formed. While headed by a bureaucrat – the Secretary of the Ministry of Information and Broadcasting -- the body wisely drew on expertise in the private sector and roped in the leadership of seven of the best known animation and VFX players in the country. The task force also included members from the state governments of Karnataka, Maharashtra and Telangana – unexceptionable, since these three states had a head start in growing an animation and visual effects ecosystem. But if that was the reasoning, the absence of Kerala in this group appears strange, considering that it has been a pioneer, outstripping every other state in the country, in creating a mechanism for growing film, video and animation technologies way back in 2007.
At any rate the task force brought the smack of firm purpose to its proceedings – and on Monday (December 26), it delivered its first report outlining a plan of action that included four parallel streams of action:
- Developing the domestic industry to make India a global hub for the AVGC industry. This includes the setting up of a National Centre of Excellence (CoE) for skilling, education, research and innovation
- Developing the talent ecosystem by introducing AVGC course content in schools, undergraduate and postgraduate education, standardizing admission tests for dedicated courses, creating innovation hubs on the lines of the highly successful Atal Tinkering Labs… all with the aim of creating 20 lakh skilled professionals
- Enhancing technical and financial viability for an indigenous AVGC industry, through tax benefits, import barriers and incentives for Intellectual Property (IP) creation
- Harness AVGC to promote Indian culture and heritage globally; offer special incentives for women entrepreneurs and promote local children’s channels.
Between the creation of the task force and the submission of its proposals, the ambit of its policy appears to have expanded as its updated acronym suggests: AVGC-XR for Animation, Visual Effects, Gaming, Comics – Extended Reality.
The report states that the Indian Media and Entertainment sector is expected to grow at 8.8% CAGR to reach US$ 53.75 billion in 2026. India’s AVGC sector had an overall market size of US$ 2.3 billion in 2019, which was just 0.7% of the global market size. The sector is expected to grow 2.2 times over the next four years driven by market forces to 1.5% of the global AVGC market which was estimated at US$ 372.44 billion in 2021 and is predicted to reach over US$ 587.1 billion by 2030
Television and Over the Top (OTT) pay by use content largely dominate the use of animation and VFX, followed by films. But gaming is expected to be the fastest growing segment of animation and VFX services with a CAGR of 12%.
The report notes the increasing number of animated series and features being produced in India which have attracted global audiences. The availability of low-cost internet access, and growing popularity of OTT platforms is expected to give a fillip to domestic consumption “VFX & Animation can be the next IT-BPM boom for India and has the potential to play a fundamental role in India becoming a USD 100 billion M&E industry by 2030”, says the report.
Leading gaming market
India is becoming one of the world’s leading markets in the gaming industry. FICCI’s Media and Entertainment Report 2022 highlights the fact that the online gaming segment grew 28% in 2021 to reach USD 1.22 billion. “This exceptional growth is fuelled by demographic factors, change in media consumption habits, as well as innovations in the industry during the past few years. Further, the COVID-19 pandemic has led to a long-lasting shift towards digital means of entertainment, which has resulted in an exponential growth of the gaming industry during the pandemic.”
The comics business appears to have been bootstrapped by the task force into the niche of animation, FX and gaming, possibly because of India’s long heritage of local comic book heroes -- Suppandi, Chacha Chaudhary, Tenali Raman, Detective Moochhwala, Shikkari Shambhu, Mayavi, and Akbar-Birbal.
Globally the comic business was worth US$ 15.2 billion in 2020 and is expected to reach US$ 23.9 billion by 2028, The dominant market share is held by the Asia Pacific region, specifically Japan—and India is eying a share of the pie.
As regards Extended Reality – the other addition to the original mandate -- the task force justifies it like this: “The number of use cases for Extended Reality (XR) technologies is rising rapidly across industries. The impact of these technologies— augmented reality (AR), virtual reality (VR), and mixed reality (MR)—is being felt across a myriad of industries, notably healthcare, hospitality, education, and retail.
The details listed above are drawn from the document “Draft National Policy for Growth of Animation, Visual Effects, Gaming, Comic & Extended Reality sector in India” which can be found here
A companion report “Realizing AVGC-XR Sector Potential” can be read here.
The Task Force has also released a report containing “A draft model AVGC-XR policy for states” which can be found here
The last report would suggest that states are being encouraged to create their own policies for this sector, using the draft as a template. This is perhaps aimed at offloading some of the fiscal load of a national policy and encouraging states to create their own package of incentives.
Some states do not need this nudge, especially those who were fortunate enough to attract global and local animation and FX companies.
States with a head start
Bangalore’s players created the Association of Bangalore Animation Industry ( ABAI), back in 2006. Earlier this year the Karnataka government joined ABAI to set up the ABAI AVGC Centre of Excellence in the Whitefield area of the state capital, with multiple state-of-the-art facilities for digital production, post production, motion capture, 2D and 3D animation, green screen and rendering – all under one roof.
In 2015, Maharashtra announced an IT and IT enabled Services policy which included provisions to promote the sunrise sector of Animation, Visual Effects, Gaming and Comic (AVGC). The state is fortunate to be the home to pioneering animation and VFX training institutes like Whistling Woods and to dozens of FX studios that support the Bollywood and advertising industries in Mumbai.
In 2016, the government of Telangana announced an “Image Policy” to promote gaming and animation industries, offering land in Hyderabad and Tier II cities in the state. TVAGA— Telangana VFC, Animation and Gaming Association – is a non-profit organisation promoting the media and entertainment ecosystem in the state.|
The first among states to see potential in animation and visual arts was Kerala. In 2007, KINFRA, the Kerala Industrial Infrastructure Development Corporation, formed a subsidiary company to create the KINFRA Film and Video Park, in 75 acres of greenery at Kazhakuttam on the outskirts of the state capital Thiruvananthapuram, inviting film and TV production houses and animation companies to set up units. It was an idea ahead of its time -- but today India’s first infotainment park is home to processing labs, recording studios, digital post production houses, 2D and 3D animation houses – and India’s largest motion capture facility run by Accel Animation. The Park also includes a 25-acre area which constitutes India’s first Special Economic Zone (SEZ) dedicated to animation and gaming.
State ventures like these four, bear testament to the viability and resilience of a domestic animation, gaming and FX industry. The new national policy may encourage others to test the waters of what promises to be a new industry combo of creative, artistic and cutting edge technologies where India has an edge.
The Chinese have a benediction: May you live in interesting times!
We may yet have a riposte: May you live in ‘animated’ times!
For illustrations to this report see Image of the Day
This article has appeared in Swarajya