IT industry body Nasscom has projected the Indian animation industry to reach $1.16 billion of revenues by 2012. The industry is currently worth $460 million and is expected to grow at a CAGR of 27%. The Indian Animation and Gaming 2008 report outlines shortage of skill-sets, high cost of consoles and lack of sufficient bandwidth along with the limited appeal of Indian animation films as some of the challenges facing the industry.
“The fiercely competitive global market place calls for disciplined effort as well as policy measures in this direction. Providing tax breaks and holidays to animation and gaming development studios, setting up education centres and setting up special zones to create an entire ecosystem will go a long way in accelerating industry growth,” said Ganesh Natarajan, chairman, Nasscom.
Increase in budgets of Indian animation films, more international releases, improvement in skill sets are expected to be the growth drivers. The gaming and animation industry has outpaced the growth rates of its counterparts and the last few years have seen the industry evolve and mature, said Som Mittal, president, Nasscom.
Custom content development is the largest segment as of today, with an estimated industry size of $187.5 million while animation education is slated to be the fastest growing. The report expects the gaming industry in India to reach $1.06 billion of revenues by 2012 from its current $212 million.
“With change in the intellectual property ownership, the rights of animation will be retained by the developers which will enable them to exploit alternate revenue streams such as merchandising and sale on digital platforms,” said Farokh Balsara, national sector leader, media and entertainment at Ernst &Young.
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