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India's UTV on digital spending spree

Disney-backed Indian film and TV firm UTV Software Communications has bought its way into the 360-degree production business with the acquisitions of digital media companies in India and the UK.

UTV has acquired a controlling stake in India's largest mobile and online gaming company Indiagames for US$15m, and paid a further US$13m for UK-based console gaming company Ignition Entertainment.

A further US$30m has been committed to the production of three animated movies to be released over the next three years, as part of a combined outlay of US$57m to make UTV one of the biggest gaming and animation entities in India.

Explaining the major expansion moves, UTV pointed to Cisco- and Adobe-backed Indiagames' annual revenues of around US$5m, and a client list that includes Vodafone, Verizon, Hutch and Airtel.

Under the UTV buy-in, Vishal Gondal, CEO and founder of Indiagames, will continue to head the company.

Ignition, now 70% owned by UTV, is expected to generate annual revenues of around US$15m this year, and is busy developing a new US$20m high-end game called War Devil for Sony PlayStation 3.

The two deals are part of UTV's plans to "capture world markets and build efficiencies through cross synergies" and "derive cost efficiencies by using India as a base for game development."

The three animated movies in which UTV will invest US$30m are being developed by an international talent base: Simi Nallaseth (Ice Age) is developing one title, while Arnab Chaudhury, former head of Channel V and creative director of Turner International (Asia), will be working on another.

UTV is also in the scripting stage of its CGI animation production with US star Will Smith's Overbrook Entertainment, an alliance that was announced earlier this year.

The deals have allowed UTV to create what it is now calling India's biggest gaming and animation company, with an estimated annual turnover of US$22m. Throwing in its TV, movies and broadcasting arms, UTV intends to multiply this tenfold by 2010.

"With the fragmentation of media and the emergence of interactivity as one of the key drivers of entertainment with the youth, we see new media platforms as the key to future growth," said UTV chief operating officer Ronald D'Mello.

UTV made US$31m in July by selling its kids channel Hungama TV to Disney, which also bought just under 15% of UTV for a further US$14.5m. It also recently agreed a deal with Malaysia-based Astro TV to launch a youth channel.

The US$44m latter deal will see the launch of the as-yet unnamed channel across multiple platforms, including TV, gaming and mobile. The channel will first launch in Hindi in Q2 2007, followed by other Asian languages.

UTV and Astro already operate a joint-venture kids channel called Astro Ceria in Malaysia and Indonesia. The upcoming youth channels will be aimed at 17- to 25-year-olds.

Ed Waller
11 Dec 2006
? C21 Media 2006

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