Animation, gaming firms take virtual route to success

The virtual world seems to have survived the recent slowdown better than the real world. All thanks to a unique business model. CNBC-TV18's Appaji Reddem and Sandeep Srikanth report.

The all pervasive global slowdown has burnt a hole in the pockets of companies across sectors and the animation and gaming industry also took a hit. But industry watchers say the extent of damage to this industry has not been severe and some of these firms have seen brisk business even during the recession.

Case in point: Hyderabad-based animation company DQ Entertainment. The firm has recorded revenue growth of 35% over the last eight years having a hand in developing and designing a host of characters and sequences from Mickey Mouse, to the Penguins of Madagascar, to the Iron Man, to Casper, to Little Nicholas, to the Jungle Book. DQ Entertainment says product quality is not the only secret to its success.

Tapaas Chakravarthi, CMD, DQ Entertainment, Hyderabad says," Our business model is free of risk. We do not start production of any intellectual property, whether co-production or owned by us or by service, until and unless 90% of the funds are assured, bonded, and 10% of the funds can be organised very quickly," adding that "Banks come forward. We are a very high rating company with the banks. We are an IFRS and IGAP company."

Even the Indian gaming industry, which is still in a nascent stage compared to its international peers, has survived with style. Game development firm 7Seas Technologies, for instance, developed situation-based games during the polls in the US and India and even casual online games for Christmas to capture the imagination of India's gamers.

Hits for these games have registered an all time high. The company says moderate development costs, India-specific price tags, and deals with mobile phone manufacturers, social networking websites and even retailers have opened the portal to big business.

Maruti Sankar, MD, 7Seas Technologies in Hyderabad says, "Till now, for online gaming segment, we have around 350 games and coming on to the next segment, we are going to raise the online gaming segment to 400. So this makes us one of the biggest IP based gaming development company in India."

The whole world is puzzled about the recession, and worried about how long the tough times will last. But Indian animation and gaming firms have taken the virtual route to survival and success. With growing IPs and service offers in the segment, they say, India is the future.