View | AAA video games in India: What are they and what the future holds for them

The Indian gaming industry is an ever-evolving market. While the pandemic had a major role to play in the segment’s growth, it is due to digital adoption that the sector has upscaled significantly.

Amongst the entertainment formats, video gaming specifically has been gradually gaining prominence and, in this domain, AAA gaming has been growing exponentially at a global level.

However, in the Indian market, it has yet to be fully explored and receive the recognition it deserves.

AAA is an informal classification used for games produced, as well as distributed, by a mid-sized or major publisher -- and these studios usually have higher budgets for development and marketing strategies. These games are either the highest selling or have high production values.

These types of games are usually long in format and their development requires extensive production effort as well as time. In some cases, it can take years for studios to develop one AAA game. Be it animation, design, coding, or any other segment, the developers leave no stone unturned to ensure these games offer a movie-like experience.

It wasn’t until the mid-2010s that the awareness of AAA video games picked up the pace in India. Video games were previously viewed as a niche sector. However, over time, this segment has transformed significantly, especially among youths in India who were really interested in buying consoles and games for entertainment purposes.

AAA games are yet to truly make their mark on the Indian market, and the games industry faces various roadblocks. One of the major challenges faced by the market is that the audience has yet to embrace games wholeheartedly. Gaming is still considered a form of art and source of entertainment, but not a feasible business approach capable of generating revenues. Even the home console market in India is comparatively small at this moment in time.

Parents refrain from buying video games and consoles for their kids as they are restricted by the common notion that games are a major distraction for children from their studies. Ensuring that there is awareness about the business of video games, and it being a viable source of employment as well as entertainment, is the dire need.

The video games industry is highly competitive and there is currently a skill gap creating another hurdle in the hiring and recruiting of talent to develop AAA games. However, this can be bridged by sourcing talent possessing the required expertise, especially the young millennials who are enthusiastic about gaming.

Owning and playing games in India is an expensive hobby to maintain, and audiences are not ready to spend, for example, Rs 4,000-5,000 or more, for any newly launched game.

Mobile games are often free to download, but they approach gamers with a different business model. They will usually have in-app purchases designed to constantly show ads to try to convince the players to buy coins or other in-app items.

It is important that the pricing of AAA games has to be competitive, so that these games can eventually move into the category of an affordable hobby. This can be resolved with the adoption of Xbox Game Pass and PlayStation Now-like subscription models, which are more like Netflix services for games.. With these kind of subscription models -- where gamers pay a set amount per month and have access to whole catalogues of games to play -- picking up pace, pricing might not be an issue anymore for AAA games.

The future of AAA gaming is progressing in the right direction; the trend was even discussed in the Indian Gaming Summit last year. As the gaming industry is evolving at a significant pace in India, players are now keen to invest in AAA games in India.

There are challenges to overcome but the gaming industry has evolved significantly in terms of story, intelligent designs, and artwork in games.

Indian audiences are beginning to accept gaming as entertainment. The pace is gradual for now, but will no doubt accelerate in the years to come. It is anticipated that since the India-based audience is becoming more aware and informed, it will start possessing a keen interest in games, and once society starts adopting gaming and realising their substantial presence as well as importance, the market will grow and proliferate.

What is also noteworthy is that India’s transition to 5G and the availability of high Wi-Fi speeds have led to a boom in streaming services such as Netflix, Amazon Prime and Disney+ Hotstar. Following the same trajectory, the projection of AAA gaming is also set to spike in the times ahead.

With the growing user base of gamers, Indian developers will be pushed to create localised AAA content -- the gaming experiences, interface, and setup, as well as the characters, will have a stronger representation of Indian culture. What also needs to be understood is that government support is equally important to help boost the industry and achieve the goal of spreading awareness.

According to Grand View Research's report, the global video game market was valued at $151.06 billion in 2019 and is projected to grow at a CAGR of 12.9% from 2020 to 2027. Constant tech deployment coupled with innovation in both hardware and software is expected to be the major factor driving the growth of the segment.

The report further states that the APAC region, especially India, is an emerging market. The increasing number of online gamers and surge in online gaming tournaments in this region are encouraging vendors to launch diverse platforms allowing gamers to access AAA-rated games -- so it would be appropriate to say that the AAA gaming domain will pick up pace soon.

Various studios are developing robust plans to move into the AAA gaming space after realising the potential in the market. With the anticipation that this segment will grow in India in the times to come, the country will soon emerge the hub for AAA gaming companies. Players in India will be able to play games anytime, anywhere, on any device, as well as being able to also stream games on any device, and only pay for the usage.