AVGC Sector

Context (TH): India’s Animation, Visual Effects, Gaming and Comics, and Extended Reality (AVGC-XR) sector to become a $26 billion industry by 2030.

What is the AVGC Sector?

Animation, visual effects, gaming, and comics (AVGC) is an industry that includes animation, visual effects, gaming, and comics.
The AVGC sector in India has the potential to become the torch-bearer of “Create in India” and “Brand India.”

The sector is growing at 30-35% annually.
At present, India contributes about $2.5-3 billion out of the estimated $260-275 billion global AVGC market.
It employs about 2.6 lakh professionals; expected to create over 23 lakh jobs by 2032.
It has the potential to become a $26 billion industry (5% of the global market) by 2030.

Growing OTT user base: Over-the-Top user base is expected to grow at a CAGR of 7% between 2021 and 2024 with a penetration of 45.8% in internet users.
Advent of New Technologies like Augmented Reality and Virtual Reality.
Growth of Smartphone Users: In 2021, the number of smartphone users in the world stood at 6.3 Bn and is expected to reach 7.5 Bn by 2026 (at a CAGR of 4% between 2021 and 2026).
Wide spectrum of applications: Global animation and VFX in advertisement is projected to grow at a CAGR of 10.9%. Gaming is growing at a CAGR of 12%, with Gamers demanding high-quality productions with engaging VFX and realistic animation.
Growing 5G Presence: By 2026, 5G mobile subscriptions worldwide are forecast to exceed 3.5 Bn, led by Asia-Pacific, North America, and Europe. This is expected to bring a telecom revolution.
Increased R&D Investments: E.g. EA Sports spends up to 25% of its total expenditure on R&D with the proportion of spend increasing every year.
Surging Popularity of Comic Events, such as Comic-Con, have gained popularity across world providing fans the opportunity to interact with favourite content creators, receive sneak peeks, etc.

Non-availability of data such as employment, industry size, education intuitions, etc. for the AVGC sector, makes decision-making tougher for entities.
Absence of adequate training infrastructure, deterioration in the quality of training being delivered to students, impacting the quality of output and human resources for the AVGC industry.
Skill Gap: The AVGC sector in India will require over 20 lakh skilled professionals by 2024. However, the current talent pool is only about 4 lakhs.
Legal uncertainty: E.g. Karnataka High Court struck down substantial provisions of the Karnataka Police (Amendment) Act, 2021, which prohibited online gambling and skill-based gaming platforms.
Lack of a dedicated fund for the sector and ambiguities in GST laws on skill-based games hinders its growth.
There is no apex institute in India for the AVGC sector, unlike other sectors such as engineering, design, management, packaging, etc.
No national-level policy level framework exists for the AVGC-XR Sector.
Less focus on Research Development.
Lack of original Indian intellectual property as most work in this sector is outsourced.

Model Intellectual Property Licensing Agreements (IPLAs) may be developed by the AVGC promotion nodal agency.
Collective licensing agreements should be promoted among the existing players to create individual intellectual property and prevent IP rights infringements.
Indian AVGC companies should initiate conversations with Global AVGC companies to offer their servers for small Indian developers to create their own games.
A platform for pro bono legal and technical consultation on IP protection for developers and designers, like the Patent Facilitation Program under the Department of Science & Technology may be established in coordination with the industry-led incubators and accelerators.