India sets up Animation, Visual Effects, Gaming and Comics task force: What this means for future of metaverse in country

Experts claim 'there is no reason why India cannot be a world contender in building the metaverse' if the announcement of the AVGC task force in Budget 2022 is followed by robust execution.

Nimish Sawant March 05, 2022 10:38:10 IST
India sets up Animation, Visual Effects, Gaming and Comics task force: What this means for future of metaverse in country

Metaverse. Representational image

Finance Minister Nirmala Sitharaman had made an announcement during her Budget 2022 speech on 1 February that India’s creative industries have been waiting for a long time.

Sitharaman announced the setting up of an Animation, Visual Effects, Gaming, and Comics [AVGC] promotion task force while presenting the Union Budget.

“An AVGC promotion task force, with all stakeholders, will be set up to recommend ways to realise this and build domestic capacity for serving out markets and the global demand,” said Sitharaman. 

The larger idea behind this announcement is to give a fillip to youth employment potential in this sector. The announcement has garnered a mostly positive response from industry players. 

Manish Agarwal, CEO of Mumbai-based mobile gaming and entertainment company Nazara Technologies, said that the task force would facilitate employment for the youth. “India presently commands around 10 percent of the global AVGC market, and has the potential to reach 20 to 25 percent by 2027,” he said.

Gaming, a growing sector in India

According to a Redseer report done with Lumikai, India’s gaming market is expected to jump from $2.2 billion in value in 2021 to $7 billion by 2026. Also, India’s gamer base is expected to touch 700 million by 2025. The report also found that gaming company studios increased from just 25 in 2015 to over 500 in 2021.

Speaking to Firstpost, Salone Sehgal, general partner at Lumikai said that the taskforce was a step in the right direction. “Task forces are useful for achieving awareness and education as well as recommending actions to policy makers. It can result in outcomes such as increased employment in the sector, clarity on regulations, and private sector funding attracting more domestic and global venture capital funds,” said Sehgal. 

Back in December 2020, Minister for Information and Broadcasting Prakash Javadekar called AVGC a sunrise sector. He also announced that the government was forming a Centre of Excellence [CoE] in partnership with IIT Bombay, where courses in the AVGC sector would be provided. The Karnataka government has also launched an AVGC Centre of Excellence in Bengaluru. 

When asked about the challenges facing the task force when it comes to the gaming industry, Sehgal outlined four aspects that needed immediate attention to ensure the task force led to policy outcomes. 

  1. Talent development: Creation of Centres of Excellence encourages institutes to come up with video game development courses. This has to be a constant endeavour to encourage youth to take up game tech and game design as a mainstream career option.
  1. Financing: This includes a combination of government and private sector financing. 
  1. Access to global best practices: Having worked in the gaming sector for over a decade, Sehgal has seen the benefits of knowledge exchange between industries in different geographies. According to her, India has a thriving deep tech and animation sector, but there is still a lot to learn when it comes to best practices in areas like data science, UI/UX design, and there is immense potential for collaboration.
  1. Building from India for the world: “The last two years have been exciting, and Indian companies are seizing the global landscape in the B2B, SaaS, and edtech space. We should be leading from the front when it comes to gaming culture and entertainment as well,” noted Sehgal. 

Another area where Sehgal felt the task force could help was in popularising Indian gaming events. “Right now, a lot of gaming focused events such as the India GDC are managed by game developers and enthusiasts. There is immense scope to make it a global gaming event.”

According to Paavan Nanda, co-founder of WinZO, the gaming industry has the potential to become a trillion-dollar industry. WinZO has announced a $20 mn Game Developer's Fund with an aim to provide a platform to the best minds to disrupt this emerging global gaming industry.

One of the major roadblocks when it comes to the sector is the talent. According to Sitharaman, the All India Council for Technical Education [AICTE], which regulates technical education in India, will be one of the stakeholders on the educational front, and will also seek recommendations from industry bodies. 

India sets up Animation Visual Effects Gaming and Comics task force What this means for future of metaverse in country

Aishwarya Shivakumar, CEO, Oddz Finance, a decentralised finance trading platform, told Firstpost that there needed to be regulatory clarity in the sector. “The task force should assess the sector and propose legislation to mainstream it in India. It should establish parameters for monetising the business in order to keep illicit activity at bay,” said Shivakumar. 

Last year, many states in India had banned online fantasy sports apps. Unless there is a clear categorisation of gaming apps, this issue will keep cropping up, notes Sehgal. “When the government says they are going to ban real-money games, it has an impact on all online gaming  so it is important to have some regulatory clarity,” she said. 

Getting meta?

Unless you have been living under a rock, there is no way you have not heard of the term metaverse. Even Facebook CEO Mark Zuckerberg changed the name of his company to Meta Platforms Inc.

According to Matthew Bell, a venture capitalist who has also penned 'The Metaverse Primer,' “The Metaverse is an expansive network of persistent, real-time rendered 3D worlds and simulations that support continuity of identity, objects, history, payments, and entitlements, and can be experienced synchronously by an effectively unlimited number of users, each with an individual sense of presence."

A major segment of the metaverse lies in creating virtual worlds which make users feel as close to reality as possible. Disciplines which this touches on encompass animation, visual effects, and gaming apart from the hardware implements such as augmented reality [AR] or virtual reality [VR] glasses. 

According to Jethil Thakkar, media and entertainment sector leader at Deloitte India, the AVGC task force can help create close to 20 lakh jobs according to Deloitte projections. “These are critical skills for growth of the metaverse, and India is poised to take advantage of this ecosystem."

But is a future-looking technology sector such as the metaverse really relevant for the Indian market yet? Sehgal feels the task force should have short-, medium-, and long-term goals.

“If we want to make a robust policy foundation, we can start looking at gaming systems which can evolve into the metaverse or mixed reality. There is no reason why India cannot be a world contender in it.”

Shivakumar concurs, noting that the task force could boost the Indian version of the metaverse. 

Ankit Jindal, co-founder of Biconomy, a web3 infrastructure startup counts the metaverse as one of the biggest opportunities in the coming years. “Fortunately, India also has one of the largest developer communities and crypto adoption in the world that with the right incentives from the government such as AVGC task force, can propel India as a global leader in the metaverse,” said Jindal. 

Charuvi Agrawal, founder and director of Charuvi Design Labs, told Firspost that metaverse needed a lot of content, and a lot of money is going into it. “Animation industry will have a big impact for sure but for that, the content has to be such which brings in eyeballs, and consequently advertisers. This can build a sub industry which involves big studios and the gig economy.” 

According to Agrawal, virtual worlds creation requires digital assets and generation of immersive experiences. “Till we are able to fully cater to this requirement in its most innovative way, there won’t be many takers,” she notes.

Indian IP is critical going forward

Everyone Firstpost spoke to for this piece agreed on the fact that the AVGC sector in general suffered a lack of original Indian intellectual property as most work in this sector is outsourced. 

Jatin Varma, founder of Comic Con India, told Firstpost he was not surprised at the announcement of the task force as the conversations were ongoing for a couple of years. “Comics end up being the genesis point for a lot of the IP that is developed in animation or gaming, whether directly or by inspiration. Comics are just one part of the story, the actual value lies in the IP — the stories and the characters, which can be further developed into various mediums,” said Varma, noting that he was happy that comics got a mention in the Budget.

When it comes to conversations around the metaverse, there is a similar lack of globally popular Indian IPs to bank on. According to Jindal, “Most traditional as well as new age blockchain games don’t take much inspiration from Indian art, history, stories, and culture. This gives Indian companies in this space a lot of room for experiments and innovation.”

Banking on interest around comics industry

Given the fact that Comic Con India has completed over a decade, there is a definite interest in the sector for the Indian youth. But Varma says that comics is more of a community rather than an industry in India, with a huge potential for growth. While Varma is skeptical of any government involvement in creative sectors, he feels the AVGC sector could have a positive effect towards the formalisation of the comics sector. 

India sets up Animation Visual Effects Gaming and Comics task force What this means for future of metaverse in country

When asked about the challenges facing the comics industry, Varma notes that one cannot call it an industry, but more of a community of passionate creators. “I think one of the key areas where government intervention could have a positive impact is changing the perception about comics. By simply making them part of the curriculum in schools and colleges, it can overnight add millions of potential readers and buyers for the long term,” said Varma. 

The ideal outcome that Varma expects from the task force is ensuring the comics community transforms into an industry which can lead to not only employment but entrepreneurial opportunities as well. 

Animation sector needs to shed the outsourcing mantle

Take any famous visual effects-heavy Hollywood film, and chances are that some of the work was done in an Indian animation studio. The roaring success of the Baahubali franchise reiterated the quality that Indian animation studios can deliver. But homegrown examples like Baahubali pale in comparison to the work that Hollywood or foreign productions bring to the Indian animation and VFX sector. 

Agrawal of Charuvi Design Labs has worked on the hit Indian mythological and fantasy animation series The Legend of Hanuman. She notes that while Indian animation studios do great work, it is mostly outsourced work which is cheaper to execute, given lower salaries in India. 

“We need to transition towards creating innovative and highly creative content, and for that, certain skills need to be developed further. One major area to focus on is specifically, writing for the animation industry. We genuinely need a lot more storytellers, and if we are to compete with the US, it starts here,” says Agrawal. 

India sets up Animation Visual Effects Gaming and Comics task force What this means for future of metaverse in country

Still from Dabangg animated series

Skill development, hardware/software costs, and economic support from the government are the three major areas that the task force needs to address, according to Agrawal. “For each artist, a powerful workstation has to be assembled with a multitude of software licenses, backed by a robust backend. Since this is the business of making IP, security requirements are high. This is a barrier for entry for many studios, and also makes scaling up very difficult. The government has to think of making this cost lower so that we get a price arbitrage compared with other developing nations,” said Agrawal. 

Tax breaks and easy credit are important boosters for the development of industries within the AVGC sector. 

Sehgal from Lumikai gave examples of countries where the gaming sector thrives thanks to government support. “The UK has creative industry support, and offers tax relief in the gaming sector. Finland has a similar program. Even Germany has a Federal Gaming Fund. These initiatives encourage the AVGC segment without them having to raise millions in funding.”

Agrawal gives the example of the IT industry and how government support in the early years had made that industry thrive. “Lower taxes or easy credit to scale up is crucial.”

While all the interviewees noted that the task force was a brilliant idea, execution is another matter altogether. In every sector though, skill development and government support in the form of tax breaks were two common challenges that experts noted the task force needed to address. The announcement of Centre of Excellence by the government is a good start. In a couple of years, we should get a good idea of how this has panned out.

Nimish Sawant is a Berlin-based independent journalist, with over a decade's experience working at Indian publications. He was associated with Firstpost as the Associate Editor, Tech2, till January 2020.
He tweets @nimsaw and can be found on Instagram here.

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