His monkey face, muscular human body, and simian tail may not appeal to gamers in the West, but for those familiar with the ancient epic of Ramayana, there’s nothing strange about this devotee of Rama, who fights evil, traverses oceans, lifts mountains—and easily holds his own with Spiderman, at least with India’s mobile gaming fans.

Indiagames got the worldwide rights to make a mobile game in time for the Hollywood blockbuster’s release—just as another Indian game developer came out with a game based on India’s first full-length animated feature film, Hanuman.

Both proved very popular, clocking between 20,000 and 30,000 downloads a month for over six months now, says Sanjay Trehan, head of broadband and content at Delhi-based Times Internet, a unit of India’s largest media group, Bennett, Coleman & Co. There’s a reason for all this madness: a recent survey by Pyramid Research showed that nearly a third of cell phone users in India play games on their mobiles, and gamers are showing a growing preference for local content.

Tata Indicom, for example, recently started marketing a popular homegrown comic strip called Uncle Pai. Interestingly, the strip was originally printed in English for city kids to learn about Indian classics. Adapted to CDMA phones—with speech balloons in several languages—they turned out to be a low-cost way to repurpose the strip and generate revenue in several other language markets across the country.

“The Indian market is ready to explode because people want value-added services on their phones,” says Mohit Bhatnagar, vice president, alliances, at Airtel, India’s No. 1 wireless operator. “Game downloads are increasing 400 percent year on year.” But just how fast the market is growing is a matter of opinion. Arun Gupta, CEO of Mauj Telecom, reckons there are currently 600,000 game downloads a month; Rajesh Rao, CEO of Dhruva Interactive, a Bangalore-based animation and gaming company, puts the number closer to 1 million.

Running the Numbers

India’s wireless-game market will generate annual revenues of $336 million by 2009, according to projections from Delhi-based Nasscom, the India software industry body, and U.S. research firm InStat/MDR.

An analyst at Mumbai-based equity research firm SSKI says he expects the wireless value-added services market to grow from an estimated $77 million to $844 million in 2010. Games constitute about 6 percent of this revenue today but their share is expected to rise to 8 percent by 2010.

That’s much less than the $336 million projected by InStat/MDR and Nasscom. “In a market that’s growing by over 50 percent every year, there can be no accurate estimates,” says Mr. Rao. “The market is so dynamic that I really cannot say for certain how fast it will grow.”

Short messaging service (SMS) tends to dwarf all comers in the value-added services, accounting for 80 percent of India’s VAS market. Next comes ring tone downloads, followed by games. Alok Shende, an analyst with Frost & Sullivan, reckons a 6 to 8 percent VAS share for games is about the norm. “Even in Korea, VAS accounts for just 16 percent of a mobile operator’s total revenues. Of this, games take up about 10 percent,” he says.

It’s a nice story so far, but Pyramid analyst Nick Holland points out that there are obstacles to growth: a third of Indian mobile users, for instance, remain cut off from serious gaming for lack of decent handsets like Java-enabled phones that support games.

It seems there are problems that even the amazing Hanuman cannot solve. But Reliance Infocomm has been working on it, and now offers over 60 games that run on black and white displays—in a variety of Indian languages.

The most popular games tend to be those based on cricket, Bollywood movies, local TV serials, mythic characters, and car and bike racing, often with celebrities as leading characters. The biggest hit so far has been Sholay, based on the blockbuster Bollywood movie of the same title. The action thriller packed movie houses in the country when it released in 1975 and still draws audiences when it periodically returns to the big screen. Rajiv Hiranandani, CEO of Mobile2Win, the company that created the game, reports over 1 million downloads, encouraging results as it prepares to release a series of 3D games. Part 2 of Sholay, a multi-player game, should be ready for downloading within months.

Coming Home

For Indiagames, a company that started developing games for the local market and had to move into contract manufacturing for Hollywood studios to survive, life has finally come full circle. Over 25 percent of its games are now targeted specifically at Indian audiences.

“Even a 20 percent success rate of our portfolio is enough to make money,” says CEO Vishal Gondal. “The market has grown 10 times in one year.”

“Even a 20 percent success rate of our portfolio is enough to make money,” says CEO Vishal Gondal. “The market has grown 10 times in one year.”

Meanwhile, Mauj Telecom, which recently received $10 million in venture funding from Westbridge, IntelCapital, and Sequoia Capital, is making inroads in games using regional languages. CEO Mr. Gupta says he expects games to generate 40 percent of his revenue over the next couple of years.

, and Sequoia Capital, is making inroads in games using regional languages. CEO Mr. Gupta says he expects games to generate 40 percent of his revenue over the next couple of years.

“Games around festivals such as Christmas, Germany’s Oktoberfest, and Indian festivals such as Diwali and Holi are popular,” he says, “but only if released at the corresponding time.” Mr. Gupta also points out that India’s classic love stories are proving popular in regional languages.

Over a dozen companies are now serving the local market with local themes. “The more the merrier,” says Dhruva’s Mr. Rao. “We compete with so many other types of entertainment, so content needs not only to be compelling, but also plentiful and variegated,” he says.

Mr. Rao finds that most Indians game casually, to pass the time while waiting in queues or while commuting. So, the games are designed to be entertaining and are priced low: between a dollar or two per game. As India’s wireless population grows by 4 million subscribers every month, industry players will benefit by having a new revenue stream and channel for selling their entertainment content, says Deepak Kapoor, Pricewaterhouse-Coopers’ Indian entertainment & media practice leader. Since competition has sliced talk-time rates to about two cents a minute, revenues from gaming should make up for any losses incurred on voice calls, he says.

No surprise, then, that carriers are pushing mobile games. Hutch, in collaboration with Indiagames, just launched a “try and buy” offer that’s been snagging sales left and right. “At least 20 percent of new consumers have bought the game after playing it [once],” says a Hutch executive.

Small Amounts, High Potential

The subscription model is actually new. But Indians like to pay small amounts, even if several times a month. That’s why the prepaid call schemes are so popular, with some carriers offering recharge coupons for as little as 10 Rupees ($0.22) because even for that, subscribers can make as many as 10 calls. By month’s end, these piranha-scale nibbles can add up to a shark bite-sized spend.

That call formula applies to gamers, too, who can subscribe to a game for Rs 20 or less a month. But over three months, that’s still more than a user would pay buying a game outright for Rs 50.

But the low-spend model is hardly failsafe, argues Frost & Sullivan’s Mr. Shende. “A good gaming company will need to have a mix of games that are high-risk and high-revenue and others that bring in stable, not spectacular, returns,” he says.

But why should India have all the fun? Mobile2Win’s Mr. Hiranandani is convinced his upcoming game based on the Indian classic Kamasutra, one of the world’s oldest instruction manuals about love and sex, has all the makings of being a global hit.

Go move a mountain, Hanuman. The world’s got other things on its mind.