India’s ban on Chinese video games turns out to be a double-edged sword

We are in the year 2500. The Indus Valley Civilization, which began on the Indian subcontinent more than 5,000 years earlier, is so advanced that it has migrated to another universe where it has flourished for millennia, undisturbed by outsiders.

But an international criminal syndicate has set its sights on its homeland, sending mercenaries from around the world to compete for its precious natural wealth – while annihilating itself with an array of weapons that make AK-47s and grenades look like child’s play.

This is the setup for industrial, an upcoming game from Indian studio SuperGaming. The “battle royale” title, in which online players fight to the death, is full of motifs from Indian culture, from the Taj Mahal to the Hindu poem of the Ramayana. It presents “an optimistic India through the prism of science fiction”, said Rishi Alwani, one of the writers.

Since 2020, New Delhi has banned a series of wildly popular battle royale games amid a brutal crackdown on Chinese technology for national security reasons. Game of TencentSingapore Sea and South Korea’s Krafton have all been restricted due to alleged China-related security concerns.

In their absence, studios and investors are turning to a new generation of locally made shooters like industrial to try to fill the void. But critics said the government unpredictable, heavy approach is holding back the sector.

“The only positive I see in banned games is that Indian studios have started developing Battle Royale,” said Anurag Khurana, a veteran executive and founder of esports company Penta.

“The biggest negative is that foreign publishers are afraid to invest in India – they don’t know if their game might be banned.”

Gambling in India took off after 2016, when a telecom price war caused mobile data prices to drop dramatically © SuperGaming

Redseer Strategy Consultants estimate that 450 million Indians played at least one game last year and valued the industry at over $2 billion – although this largely came from games involving real money, such as online rummy or fantasy sports.

Before its most popular game was banned, Krafton invested $100 million in India. Meanwhile, SuperGaming raised $5.5 million in Series A funding from a handful of overseas funds last year. Still, executives said the uncertainty means investment in the sector continues to lag.

Gambling in India took off after 2016, when a price war in the telecommunications industry caused mobile data prices to drop dramatically. With computers and consoles unaffordable for most Indians, the industry is heavily geared towards smartphone gaming. That left Chinese companies well-placed to expand, thanks to games optimized for low-cost handsets.

Deteriorating relations between New Delhi and Beijing, after a deadly clash on their Himalayan border in mid-2020, sparked a widespread crackdown on Chinese technology, with hundreds of apps including TikTok and the popular PlayerUnknown’s Battlegrounds (PUBG ) of Tencent banned on the grounds that their collection of Indian user data posed a threat to national security.

This was followed in February by a ban on Free Fire, which analytics provider said was the second most downloaded game in India, sending the parent company down 20% immediately. of the sea Shares listed in the United States. In July, India ordered app stores to remove Battlegrounds Mobile India, a revived version of PUBG released by Krafton, which said the game had attracted 100 million users.

While authorities have not explained why they targeted Sea or Krafton, neither of whom are Chinese, both count Tencent, the Chinese second most valuable company by market capitalization, as an investor. Ranjana Adhikari, partner at Induslaw in Mumbai, said their games seem to be restricted for similar reasons to PUBG in 2020.

Trend column chart by segment (in billions of dollars) showing that real-money gambling dominates Indian gambling

The companies have denied that their data collection poses a security concern. Krafton Chief Financial Officer Bae Dong-Geun said in an August earnings call that the company would “cooperate closely with authorities” to bring BGMI back.

The loss of three beloved games in as many years has left many Indian gamers distraught. “It’s really a shock,” tweeted Naman Mathur, a 26-year-old esports star known as MortaL, after BGMI was removed from app stores. “People who hoped will remain hopeless.”

“Esports gamers have really been screwed,” said Penta CEO Khurana. “They can’t go from one battle royale to another overnight. . . If you ask [cricketer] Virat Kohli to play football, it won’t work.

SuperGaming and other Indian developers hope that their next generation of “made in India” games will help fill the void, and that the use of Indian themes will resonate more with gamers.

“We’re trying to make bigger, more ambitious games for an audience that cares and matters,” Alwani said. “Where is the Indian equivalent of a Zynga, Ubisoft or [Electronics Arts]? They do not exist. The first step is to let people know that the games are made here.

Vishal Gondal, whose nCore Games is developing battle royale shooter FAU-G (a game on the Hindi word for soldier), acknowledged that turning India into a world-class gaming hub will take time. “The real power would only be seen in the next few years,” he said.

India is currently preparing new gambling regulations which Adhikari says should bring more clarity to the industry.

But in the meantime, many players are still hoping that BGMI and the others will be relaunched after fixing the security issues.

“The Indian gamer is not going to stop playing games because those games have been banned,” said Ashwin Suresh, founder of Krafton-backed live game streaming platform Loco, adding, “I think the games will be back.”

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