The next outsourced job?

[Phlegm]

The article is from the San Jose Mercury News:


India in fast lane: Game makers go overseas

By Dean Takahashi

Mercury News

Rajesh Rao isn't a big man, and as he sits at a table in Santa Clara, his leg shakes nervously. But he's certain to inspire fear in certain quarters of the video game industry.

Rao is CEO of Dhruva Interactive, a 65-person video game company based in Bangalore, India. Those who worry video game jobs will follow software and migrate to India may see their worst fears realized in this ambitious 35-year-old executive.

Game developer salaries in India are about a third of what they are in the United States, and game publishers are beginning to realize they could make games cheaper in India. But Rao says Dhruva isn't just about outsourcing grunt work to the lowest-cost location.

As an outsourcing specialist, the company has created pieces of games for large publishers. For instance, it made sports cars in a Microsoft racing game. Dhruva also develops its own games for the Indian market.

``We are acutely sensitive to the jobs issue,'' said Rao, 35, in an interview at a recent conference in Santa Clara. ``We go in there if the people involved really want to do it with us.

``Will there be jobs impacted? Yes. But is it good for the business and the industry? Yes. We see inefficiencies in the system, and we're dealing with them,'' he added.

Jason Robar, an Issaquah, Wash., consultant who brokers overseas deals between game developers and publishers, said India is climbing up the food chain of countries that make games. Its biggest advantage is its English-speaking, tech-savvy workforce. But its short history in games means that it's behind countries such as Korea and China, he said.

Besides Dhruva, other upstart Indian game companies include Lakshya Digital near New Delhi and in India Games in Bombay. Robar figures that making games in India is 30 percent to 40 percent cheaper than developing games in the United States, after accounting for higher travel and communications costs.

``India is today where China was three years ago on games,'' Robar says. ``You have to acknowledge the limitation that they don't have a long history of making games. But there's a lot of experimentation going on.''

Original games

Rao wants Dhruva to eventually create original video games for the Indian market, which he believes will become a hot market for Western video game makers.

``We'll wind up creating a much larger market for U.S. companies,'' he said.

Dhruva will focus on both outsourcing and making games for the Indian market. As it improves its track record, Rao says, the company will continue climbing up the food chain, doing more original work.

Rao started the company in 1995 with seed money from his father. By 1997, he had a team of five. He struck a promotional partnership with Intel and then hooked up with a game partner.

Dhruva developed a version of the ``Mission Impossible'' movie game for the PC under a commission from Infogrames, now called Atari. But the game was canceled for licensing reasons. The company bounced back and, in addition to continued work for Atari, it is doing work for companies such as Codemasters and Microsoft.

Rao says the company has worked on 10 high-profile titles in the past four years, including creating 85 vehicles for Microsoft's ``Forza Motorsport'' Xbox racing game. Dhruva does grunt work for U.S. game developers so they can focus on things such as character art styles and overall game play.

Lakshya Digital wants to specialize in outsourcing game development. Lakshya Chief Executive Dib Chaudhuri said his 25-person firm opened for business in September and already has five overseas clients. His company recruited its talent from a group of film animators.

``Things are changing,'' Chaudhuri says. ``There's a lot of opportunity. With companies like Dhruva spearheading it, we will soon have an ecosystem of companies.''

A poll released in May by market researcher GMI found that video game playing in India is higher than many other developing countries.

About 30 percent of those polled in India said they spend half their leisure time playing games, compared with about 20 percent in Mexico and 24 percent in the United States.

Bollywood parallel

``There's an indigenous interest in games in India,'' says Billy Pidgeon, an analyst at Go Play Research in New York. ``It's similar to the appreciation of movies and the Bollywood industry that focuses on movies about Indian culture. There might be potential for similar kinds of Bollywood games.''

Companies such as Electronic Arts are not likely to find that their sports games will do well in India. They might need a partner to show them how to create local content, Rao said. EA itself doesn't have an operation in India, but it recently added to its board Vivek Paul, who last week announced he was resigning as vice chairman of Indian tech services company Wipro to join Texas Pacific Group.

Indian game companies have barriers to overcome. They have to win the trust of game publishers, who have heard stories about the communications nightmares of outsourcing.

To stay in touch with both his own teams and his overseas publishers, Rao works from 11 a.m. India time until 11 p.m. That gives him 90 minutes of overlap with anyone working on the West Coast in the United States.

Eventually, Rao thinks online games and cell phone games will be popular in India. His company has already released ``Maria Sharapova Tennis'' for cell phones worldwide. Dhruva will release a game for the Indian market dubbed ``Pool on the Net,'' an online billiards game with Indian art styles. Dhruva also is working on an online role-playing game for the Indian market. So far, Rao says his company has no interest in making games for the U.S. market.

``We'd be at a disadvantage,'' he said. ``It's hard to imagine a game like Redneck Rampage being done by an Indian team.''

[Lyion]

Given all the programmers are already overseas, this makes sense.