Indian animation industry slows pace

India's animation industry is being hurt by the slump in the global economy. Nasscom, the apex body of IT software and services, has revised downwards its forecast for the sector, expecting a dip in growth rates for two years before becoming a billion dollar industry by 2012. Nasscom had earlier forecast the animation industry to touch $1.2 billion by 2012, aided by outsourcing and a growing domestic market. Nasscom expects the gaming sector to size up to $830 million by 2012, lower than its earlier forecast of $1.1 billion.

"Indian animation industry is expected to grow at a CAGR of 22 per cent to reach $1-billion while gaming industry to grow at a CAGR of 49 per cent to reach $830-million by 2012," said Nasscom president Som Mittal, while releasing 'The Animation and Gaming Report 2008-09'. The report, prepared by Nasscom and Ernst & Young, provides a detailed insight on the growth-drivers, business models, issues and challenges for the gaming and animation industry in the next few years. Slow growth of domestic box-office for animation movies, absence of adequate proof of concept or IP creation, and lack of availability of skills for animation industry are the other factors that have forced Nasscom to drag down its earlier forecast.