India grabs joystick

UTV pumps $75 million into its gaming biz

UTV Software Communications, one of India’s biggest entertainment congloms and Disney’s partner in the country, will pump $75 million into its gaming biz.

Company also disclosed fiscal first-quarter net profits of $5.93 million, up from $21.5 million in the same period last year, derived from income of $34 million in the quarter ended June 30.

UTV, which bought controlling stakes in Hong Kong-based Indiagames and U.K.-based Ignition Entertainment in late 2006, said it is investing in a startup U.S. venture in online gaming and acquiring a controlling stake in another U.S. firm that aggregates mobile games.

In addition, UTV is raising its stake in Ignition from 70% to 95% and increasing the working capital for three console games being developed by Ignition in the U.S., U.K. and Japan.

UTV boss Ronnie Screwvala said that moves position the group well for environmental change in the U.S. gaming market, which has long been dominated by console usage.

“Mobile is a small part of the U.S. gaming market and has been held back by archaic handset technology, but that is changing and the U.S. in absolute terms is already quite a big market,” Screwvala said. “The U.S. telcos don’t generally deal directly with games developers. Aggregators bring together games from different developers and port them into different technologies.”

Online games are also small in the U.S. at the moment, but massively multiplayer online games are growing fast and adopting Asian business models. The company UTV is backing offers online gaming via subscription services, advertising-supported free-to-use models or micro-payments. To date many online games in the American market have been repurposed Asian software, but Screwvala sees the potential for content to flow in the opposite direction, too.

“This is the second tranche of investment we’ve made in the games sector after a $50 million first round. Ultimately, the games market is going to be bigger than movies,” Screwvala said. “Everywhere we’ve kept in place the management and been gratified to see how entrepreneurial the managers and partners have been.”

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