Potential of India’s AVGC-XR Sector

India’s media and entertainment sector has witnessed exponential growth in recent years. The animation, visual effects, gaming and comics (AVGC) segment along with extended reality (XR) now showcase tremendous potential for India to emerge as a global hub for talent and content creation.

• Advanced technologies like artificial intelligence, blockchain, metaverse and more are also opening new opportunities for growth.
• With the right investments in infrastructure and skills development, India is poised to see its next wave of startups and unicorns emerge from the AVGC-XR space in the coming decade.

Defining AVGC-XR

• Animation, Visual Effects, Gaming and Comics (AVGC) refers to the interrelated ecosystem of media production industries focused on creating immersive content, interactive experiences and graphics-rich products and services across both traditional and digital formats
• Extended Reality (XR) is an umbrella term encompassing all immersive technologies like augmented reality (AR), mixed reality (MR) and virtual reality (VR) which integrate digital visualizations and overlays with the real world
• Together, AVGC-XR represents the interdisciplinary skills, tools and content that create today’s most popular entertainment experiences ranging from video games to metaverse environments

India’s Thriving Media and Entertainment Landscape

Even amidst the COVID-19 pandemic, India’s media sector saw sustained growth:

• Over $25 billion valuation in 2021, projected to reach $55 billion by 2024 at a healthy 11.5% CAGR (Boston Consulting Group, 2022)
• In 2021, digital media overtook print to represent the second largest industry segment after TV
• OTT streaming platforms invested over $2 billion in content in 2021 as smartphone and internet access expand (BCG, 2022)
• Online gaming grew 20% from 2020-2021, with 420+ game development companies in India as of early 2022 (KPMG, 2022)

India’s Media & Entertainment Industry Segments by Revenue in 2021 (In billions USD)

Global AVGC Market Potential

The global market for AVGC content and interactive technologies has boomed in recent years

• Games: $178 billion market in 2021, with 2.8 billion gamers worldwide
• AR/VR technologies: $15+ billion market by 2023
• 500+ VFX and animation studios : Operating globally

Asia Pacific accounts for nearly 50% of animation & VFX revenues currently, showcasing tremendous demand for creative media services. India with its vast talent pool in design, technology and content creation is well positioned to tap into more of this demand.

India’s Emerging Talent Pool for AVGC-XR

India has no dearth of world-class talent for the booming AVGC-XR industries.

• Institutes like IIT Bombay, National Institute of Design, Srishti Institute offer pioneering design and tech programs
• India produces over 1.5 million STEM graduates annually
• Numerous upskilling platforms like Anudip Foundation and Quad b closing workforce gaps through hands-on training in digital tools
• Over 120,000 professionals employed in AVGC sector currently, expected to reach 1.2 million jobs by 2025 (BCG, 2022)
• Cities like Bangalore, Mumbai, Hyderabad, Chennai and Delhi NCR have emergent AVGC creative hubs

Government Support Accelerating Sector Growth

Seeing its potential for job creation and global leadership, the Indian government has made the AVGC-XR space a national priority through key policies and investments.

• National AVGC Policy launched in 2022 to drive growth through lower taxes, easier licensing, educational initiatives and more
• AVGC Promotion Task Force is creating Media and Entertainment Academy to skill 1 million youth by 2025
• $130 million AVGC fund launched under Ministry of Information & Broadcasting in 2023 budget to incubate over 1,000 new startups
• State governments also boosting regional AVCG hubs – Karnataka aims to create over 100,000 new jobs in gaming, VFX alone while Telangana promotes Hyderabad as pioneer in VR, AR and more

These coordinated efforts to spur infrastructure development, venture funding, skilling programs and domestic demand all signal strong policy tailwinds for Indian firms to seize larger market share.

XR and Metaverse Expanding Interactive Media

While gaming, animation and digital content production continue on steep growth trajectories, new immersive technologies also showcase tremendous prospects. IDC predicts worldwide spending on AR/VR to reach nearly $70 billion by 2024. Key expanding use cases include

• Training and simulation for sectors like manufacturing, healthcare and defense where immersive learning boosts skill development dramatically
• Product design and industrial engineering enabling virtual prototyping and testing
• Retail showcasing allowing customized previews of real estate, automotive, fashion and more
• Live event experiences through real-time VR entertainment integrations
• Blockchain-based metaverse worlds linking virtual economies across entertainment, social interactions and even workplace collaboration

India as an Emerging Hub

Early stage funding data shows India’s surging potential in XR and metaverse platforms:

• Indian startups attracted $120+ million in early stage investment for AR/VR ventures in 2021, 6x year-over-year growth.
• Over 60 active metaverse startups in India as of early 2023, with T-Hub selecting 25 of these firms for its Metaverse Catalyst accelerator program
• Major brands also moving into new launches – Tata Neu announced plans for NeuWorld metaverse integration by 2025 while Practically launched edtech metaverse for students to boost engagement

With explosive demand for immersive content and technologies across entertainment, learning, retail, design and more industries worldwide, India’s abundant talent pipeline and surging digital connectivity put it in an optimal position to seize a larger share of the booming AVGC-XR opportunity globally.