pakistan mobile gaming and animation industry an industry capability profile 3 may 2011 0

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Babar Ahmed’s Mindstorm Studios created Cricket Revolution™ – the first PC game produced by a Pakistani gaming outfit to sell in retail stores internationally – and recently launched the official game of the ICC WorldCup 2011. Brothers Rizwan and Irfan Virk’s GameView Studios created the successful Tap franchise, which was recently acquired by Japanese social gaming giant DeNA. Hasan Rizvi’s Pepper.PK made history by developing two top-ranking paid BlackBerry applications at BlackBerry’s AppWorld store. Murad Akhtar left Stanford and Silicon Valley to form Tintash, dedicated to creating innovative casual games designed for the iPhone, iPad, and Android platforms. Umair Javed of TkXeL prides himself in creating not one but two 100% "Made in Pakistan" mobile applications and gaming companies from a university lab in Lahore. Pakistan’s mobile, gaming, and animation scene is increasingly a hotbed of a new generation of exciting entrepreneurs seeking their fair share in the riches and prosperity of a new age of infotainment, and in the process of proving a point to the rest of the world. POWERING INFOTAINMENT THE WORLD OF A Snapshot of Pakistan's Mobile, Gaming, & Animation Industry

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Page 1: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

Babar Ahmed’s Mindstorm Studios created Cricket Revolution™ – the first PC game produced bya Pakistani gaming outfit to sell in retail stores internationally – and recently launched the officialgame of the ICC WorldCup 2011. Brothers Rizwan and Irfan Virk’s GameView Studios created thesuccessful Tap franchise, which was recently acquired by Japanese social gaming giant DeNA.Hasan Rizvi’s Pepper.PK made history by developing two top-ranking paid BlackBerry applicationsat BlackBerry’s AppWorld store. Murad Akhtar left Stanford and Silicon Valley to form Tintash,dedicated to creating innovative casual games designed for the iPhone, iPad, and Androidplatforms. Umair Javed of TkXeL prides himself in creating not one but two 100% "Made in Pakistan"mobile applications and gaming companies from a university lab in Lahore. Pakistan’s mobile,gaming, and animation scene is increasingly a hotbed of a new generation of exciting entrepreneursseeking their fair share in the riches and prosperity of a new age of infotainment, and in theprocess of proving a point to the rest of the world.

POWERINGINFOTAINMENT

THE WORLD OF

A Snapshot of Pakistan's Mobile,Gaming, & Animation Industry

Page 2: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

Yet, this new generation of entrepreneurs is only part of a larger group of global entrepreneursriding upon and creating a new wave of innovation and entrepreneurship.

A piece of the global action

Pakistan’s mobile, gaming, and animation industry – not unlike many of its peers – hasridden the “new media” revolution of the twenty-first century driven by three definingevents: the launch of Toy Story by Pixar in 1996 and the coming of age of the digitalentertainment and animation industry; the launch of Facebook in 2004, and the socialnetworking bonanza that ensued; and the launch, in 2007, of the iPhone, which has sincesold over 100 million devices pushing to mainstream the smart mobile devices industry.

Pakistan’s IT and software industry is now a relatively well-established tier-2 player (behindIndia, China, and Russia) in the global IT industry. With over $2 billion of overall IT marketsize – and more than $750 million in exports1 – the industry has come a long way, and hasbeen gradually coalescing around a fast developing ecosystem designed to deliver qualityand innovation. The recent downturn in the global IT and software industry has furtherfocussed energies on the new and emerging sub-sectors – such as mobile, gaming, andanimation – whose growth has remained largely unaffected by the worldwide recession.

A 2010 Study by the Pakistan Software ExportBoard (PSEB) – the Government entityresponsible for supporting and promotingexports of IT and software from the country– hailed Mobile, Gaming, and Animation(MGA) as “the most exciting changesweeping across Pakistan’s IT industry.”A number of global and local factorscontribute to this trend, the mostimportant of which is Pakistan being hometo one of the largest mobile subscriberbases in the developing world – if notglobally. As per the latestindictors published by the PakistanTelecommunications Authority (PTA), thereare more than 97.3 million mobilesubscribers in Pakistan – a figure thattranslates to more than 59% of thecountry’s population, and over 100% of allqualified potential subscribers (excludingpeople too young to own a mobile device).Although, the penetration

MINDSTORM STUDIOS---------------------------------GAMEVIEW STUDIOS------------------------------------PEPPER.PK-----------------------------------------------TINTASH-------------------------------------------------TKXEL----------------------------------------------------GENITEAM-----------------------------------------------FOLIO3---------------------------------------------------SMONTE TECHNOLOGIES------------------------------POST AMAZERS-----------------------------------------SHARP IMAGE-------------------------------------------SMS-ALL-------------------------------------------------AKN MTECH (M3 TECH)--------------------------------CONVERGE TECHNOLOGIES---------------------------VAHZAY--------------------------------------------------EVAMP & SAANGA--------------------------------------MOOBILA-------------------------------------------------

OTHERS:PAKISTAN SOFTWARE EXPORT BOARD---------------PAKISTAN TELECOMMUNICATIONS AUTHORITY----PAKISTAN SOFTWARE HOUSES ASSOCIATION-------GAME DEVELOPERS GROUP OF PAKISTAN-----------

COMPANIES PROFILED IN THIS BROCHURE

- Director, Dream Team Films

02

P1P1P1P1P1P4P5P5P6P6P7P7P7T1T1T1

P2P2P8P8

"Aristotle said, 'Quality cannot be an act, it's a habit'. After many years and manyprojects I've come to continually realize for this to be true with Sharp Image"

Page 3: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

of smart phones is considerably less (around 1%) it is growing. The fallingprices of smart mobile devices, and better access to wireless Internet andbroadband is likely to only hasten the trend.

Another important factor in the growth of the MGA industry in the countryis a critical mass of well-qualified and quite “adaptable” technical andcreative talent, and a fast growing supply of entrepreneurs with stronglinkages to key markets – either directly or through diaspora networks –in the United States, United Kingdom and Asia. Many of these criticalcapabilities have been amply displayed in the early successes of Pakistan’sleading players in MGA industry.There is an increasing appreciation thatcross-disciplinary 'left brain - right brain' collaborations is critical to excellencein this area," says Zia Imran, the Managing Director of Pakistan SoftwareExport Board (PSEB). Zia is pushing hard for greater collaboration betweenengineering and art schools in the country.

Unlike the DotCom and the Y2K opportunities, where Pakistan’s IT andsoftware industry lost out on the first mover’s advantage, the opportunitiespresented in the mobile, gaming, and animation space are ones wherePakistan has been quite well-positioned to take advantage. The relativelyshort life-span of the opportunity necessitates that history will not bemuch of an advantage. Technological novelty puts a premium on the

ability to quickly learn and adapt, and the real advantage comes fromcreativity and innovativeness.

That’s where this new generation of entrepreneurs is placing its bets.A sizeable number of companies have cropped up to take advantage ofthe opportunities presented in this exciting space, and more are comingup almost every day. Some of the more salient ones – focusing on a rangeof domains and platforms – are depicted in Table-1.

Enter the world of mobile applications and gaming

One of Pakistan's first - and certainly the most successful - company tojump on this bandwagon was CambridgeDocs (whose mobile gamingdivision, GameView Studios Inc., has since been spun-off and acquired byJapanese gaming giant DeNA). Starting in 2005, GameView Studios Inc.created the successful Tap franchise, whose flagship TapFish has had 10million+ downloads on the Apple Appstore or iTunes. The recently launchedTap Jurassic - the newest in this series - allows players to build and managetheir very own dinosaur-inhabited theme parks, complete withTyrannosaurus Rex, Triceratops, Pterodactyls and over 40 other prehistoric

animals. In its first 10 days since launch, Tap Jurassicclocked more than 1 million users, 6 million play sessions, and an average3 logins per player per day.2

“We are thrilled with the success and longevity of the whole Tap Fishfranchise,” says Riz Virk, co-founder of GameView Studios. “Our goal hasalways been to build really high-quality sticky social games. One reasonfor the success of Tap Fish is that people think of these fish as their pets,enjoy caring for their fish, watching them grow, and showing them off totheir friends.”

03

2

"Tintash took my idea from a plan onpaper to finished app in 3 weeks! Theywere with me every step of the way,working together to make a greatproduct. They are clearly experts in theirfield and I highly recommend them!"

- Co-Founder, Seremeres Games

GameView Studios Social Games iPhone and AndroidMindstorm Studios PC Games, Mobile Games, Architecture and Exterior

Visualisation ServicesPC, iPhone, iPad, Android

SharpImage Advertising, 2D and 3D Character Animation, 3D AssetDevelopment, Visualisation Services

TV, DVD, Cable

TkXel Mobile and social games, social media and infotainmentapplications, enterprise dashboards

iPhone, Android, Blackberry, Palm, Facebook, Titanium

Tintash Casual Games, Utility Applications iPhone, iPad, Android, FacebookGenITeam Social Games, Business Applications, Educational Games iPhone and AndroidFolio3 Sports Games, Virtual Worlds, Casual Games, Enterprise

mobile appsFlash, Facebook, Android, iPhone, iPad,, and HTML5

ConvergeTechnologies

“Traditional” digital content for multiple mobile and web platforms, multichannel activation campaigns

Mobile, Digital Kiosks, IVR, Web

SMS-all Group SMS based networking, information sharing, andadvertising platform

Mobile SMS

Vahzay Enterprise Software, mobile games and applications, web, andsocial media

iOS (iPhone and iPad), Android, Facebook, and Web

Games, Embedded systems, VOIP, Infotainment, productivity,and Digital mapping

Apple, Android, Blackberry, Win Mobile, Symbian, Palm, Bada,J2ME, Java TV

Pepper.PK Games, productivity, and infotainment applications BlackBerry, iOs, Android, Windows Phone 7, Symbian, BADA

Evamp & SaangaMobile, system integration and application development fortelecoms, web and voice content

Linux, Windows

Moobila Mobile applications and games, cloud computing iPhone / iPad, Android, Windows Phone

Smonte

COMPANIES DOMAINS & SPECIALISATIONS PLATFORMS

Table-1: Specialisation and Capabilities of Industry's leading playersTable-1: Specialisation and Capabilities of Industry's leading players Source: Technomics' CompilationSource: Technomics' Compilation

Page 4: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

04

While GameView Studios has been somewhat of a trend-setter for theindustry, and has had considerable success in transforming the “sticky-ness” of its games into financial returns for the company, others are fastcatching up as well. TinTash – a developer of casual games for theiPhone, iPad, and BlackBerry devices – has had a fair bit of success withFishing Frenzy (2 million+ downloads) as have TkXeL with its franchiseof hunting games (1.5 million+ downloads), and GenITeam withGangWars (top paid app for Android in Q1 2010).

Not unlike GameView Studios, many of these companies beganoperations as software services and outsourcing companies, developinggames on spec for some of the well-known game publishers and brandsfrom around the world, such as GameZebo, Digital Chocolate, BBC, MTV,Barclays, NBC Universal, Verizon, and PlayFirst, etc. and have only graduallybegun to make their transitions from services to products companies.

TkXeL, for example, boasts more than 200 mobile game titles since itsinception, and 20+ Top-100 credentials for a variety of clients. Increasingly

These companies are now developing their own titles across a range ofpopular genres, and successfully publishing them.

“The key”, says Murad Akhtar of TinTash, “is to get the right approachand balance for monetisation ultimately through experimenting withuser behaviour and psychology and pricing strategies. This is somethinga lot of people around the world are thinking about and experimentingwith right now and Pakistani companies are not far behind. A fewPakistani companies have figured out the puzzle of monetisation andwe are all learning from these closer-to-home experiences.” There seemsto be a general feeling within the industry that 2011 will be the year ofsuccessful monetisation for a number of Pakistani mobile gamingcompanies.

Pakistan presents an excellent value proposition for mobile gamedevelopment. It costs about $15-25K to develop a decent game on amobile device in Pakistan, which is broadly in line with India andsomewhat cheaper than Central Europe.

The cost for doing the same in the United States is an order of magnitudehigher. It is, therefore, possible for a small start-up of 10-12 people witha burn rate of $250K a year to develop 15-20 games per year – a numbergood enough to turn up at least one (perhaps two) “winner(s)” in thecourse of a year.

As more and more companies make their mark, critical skills such asproduct development, product life-cycle management, publishing, and

monetisation will develop and mature within the industry. “Creating

your own product”, says Umair Javed of TkXeL, “is not an easy job. Youhave to re-write the DNA of the entire services company. Only now, aftermuch hard work,do we believe that we are in a position to ‘balance’ thetwo within our company.”

Table-3: TOP GENRES OF GAMES PLAYES ON SMART MOBILEDEVICES FOR 3 MONTHS ENDING FEB 2010 US MARKET

100.0Total Audience: 13+ yrs old

Arcade Puzzle 12.9

Card 11.9

Word or number 11.4

Casino 7.6

Retro Arcade 6.3

Board 5.4

Quiz 3.9

Strategy 3.7

Sports 3.3

Racing 3.0

Action/adventure 2.5

Music/Rhythm 2.3

First person Shooter 2.0

Other 1.3

COMPANY GAMES FRANCHISES AND INFOTAINMENT ACCOLADES

GameView Studios Tap Series: TapFish, TapRanch, TapMall, TapJurassic TapFish grossed 10 million+ downloads sincelaunch 1 year ago

Mindstorm Studios Cricket Revolution and Cricket Power Whacksey Taxi Pakistan’s first PC Game sold internationally ICCWorld Cup 2011’s official Cricket GameNumber 1 iPhone game in 40 countries

Tintash Fishing Frenzy 2 million+ downloads since launch 2 years ago750K+ downloads since launch 8 months agoRanked 2nd in paid games in Australia and top-10 inUK.

Doodle TossStick CricketSeven Wonders, Wordlists, Nitwit Test

GenITeam GangWars Top paid App for Android in Q1 2010, Ranked 7th inGoogle Global Android Developer Challenge 2009Family Builder, Brain Twister

Folio3 Secret Builders Over 2 million active and premium usersworldwideSoccerWorld and Ice Hockey

TkXeL Hunting Genre (4 games)WW2 BeachheadFighterpediaBrief Room

1.5 million+ downloads, Top30 paid game on iStore.Top3 paid simulation game.Top-100 Reference App.Top20 in News Category on Apple App store

Pepper.PK

Both products were best selling paid Blackberry

Apps worldwide with Photo Editor grossing 2million+ downloads

Photo Editor, LED NotifierCricket World Championship 20, Skitrix,Battle Olympus

Moobila iPicEdMotionSnaps, MediaSlates

Consistently among top 50 paid applications inphotography category

Table-2: Signature Game Francishes and Infotainment titles of Industyr's trailblazersTable-2: Signature Game Francishes and Infotainment titles of Industyr's trailblazers Source: Technomics' CompilationSource: Technomics' Compilation Source: Comsource MobilensSource: Comsource Mobilens

Page 5: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

As a clear sign of maturity, this transition is now taking place across theindustry. A lot needs to happen, however, before they become householdnames in the global mobile marketplace, but the potential and promiseis apparent and well-established.

Games are not the only avenue on the mobile platform that Pakistanicompanies are focussing on. A number of players have seriously lookedat the broader educational and infotainment markets. Folio3 – judged asone of the Harvard Business School’s All-World Fast Growth 500 companies

in 2010 – has some interesting products in its portfolio. Folio3 has beeninstrumental in creating an online educational platform for SecretBuilders™– a company with its roots in the Pakistani diaspora in the Silicon Valley– which boasts a virtual world for children 5 to 14 years old powered bya Web 2.0 community of children, parents, educators, writers, artists andgame developers. On SecretBuilders™, children can explore virtual lands,undertake quests, play games, maintain a home, nurture a pet, and interactwith their friends.

Pepper.PK, another noteworthy company, has developed two top-sellingapplications – including a photo editing suite – across all categories andgeographies on Blackberry AppWorld. Mahe Zehra, the Director ofMarketing for Pepper.PK, noted that "Pepper's success on the world stagewith two World #1 BlackBerry apps shows that the level of product qualityand competitiveness in Pakistan is truly second to none."

Other companies are taking more unconventional risks. SmonteTechnologies, for instance, focuses on the niche market of embedded

systems integration with mobile devices. Smonte's clients ship theirhardware to Pakistan for software integration with a variety of platforms.Smonte integrated an engine/throttle device for a Formula One race carwith an iPhone /iPad that its engineers and technicians could use tomonitor the progress of the car in real-time. Smonte recently worked ondigital mapping systems for iPhone/Android for a client in the UKimplementing complex algorithms to produce real-time maps used by aUK, Government entity.

First forays into PC games

In 2009, Lahore-based Mindstorm Studios created Pakistan’s firstinternationally-retailed PC game. Cricket Revolution™ is quite remarkablein its attention to detail, a rich team selection, multi-player mode, realisticaction, and a variety of controls to make gameplay incredibly interesting.Equally remarkable, however, is the story of how its founder, Babar Ahmedand Mindstorm Studios team of developers, illustrators, designers, andartists, with no prior experience or expertise in game development, pulledout a rabbit from the proverbial hat. Not only did the Mindstorm teamself-teach itself the challenges and intricacies of designing a PC game butalso, unable to afford a modern $200K motion capture studio, built itsown by extending capabilities of low-cost devices and software to achieveworld-class motion-capture quality. Since then, Mindstorm has offered tomake this device available for other game designers in the country to use.

Building up on its success with Cricket Revolution™, Mindstorm recentlylaunched Cricket Power – the official online game of the ICC Cricket WorldCup 2011. Cricket Power is the most advanced 3D browser cricket gamedeveloped to date. It features all 14 teams along with official players,stadiums and kits, and is played directly in the browser. The game ispowered by a superior cricket engine at its core, coupled with a pick-up-and-play interface to appeal to casual and core gamers alike3.

Babar Ahmed is very passionate about the potential of game developmentin Pakistan. He believes that local game developers face a significantlygreater task than their peers in more developed markets because ofdeficiencies in the overall ecosystem, and that the companies must learnto tap into, and work with other elements of the gaming value chain thatexist outside the country. “The closer we go towards the consumer, theless expertise we have in new entrant countries like Pakistan, such as inthe critical steps of publishing and monetisation”. This, he believes, willcome with experience.

Fresh from a gruelling launch of Cricket Power, Mindstorm is currentlyfocusing on the iOS platform. “We’ve done a ‘first’ in Pakistan’s history.Despite no prior experience, we took up the challenge and de-mystifiedPC game development for ourselves. We will put this expertise within anappropriate vehicle within Pakistan and now want to focus our energiestowards the relatively ‘low-tech’ but ‘high-impact’ mobile platform”, saysBabar. Mindstorm Studios hopes to launch at least one iPhone title everyquarter in 2011.

Figure-1: The PC console Game Development Process and Value Chain Source: Technomics International (Adapted from Mindstorm Studio)

Game DevelopmentCompany

Outsourced Developer(may be used)

Game Publisher Investor may partially fundTypical Costs: from $5 - 10mn to 50 mn

Page 6: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

CGI movies and animation: Building upon a cultureof “story telling”

Computer Generated Imagery (CGI) and animation is another emergingarea of considerable promise in Pakistan. Post Amazers – a venture-fundedcompany created in 2002 – was one of the pioneers in this relatively smallyet upcoming genre in the country. In its heyday, it provided creativeservices from concept to execution, including art direction, broadcastdesign, 3D animation, post-production, sound design, etc. Its work hasfeatured in titles such as 'Son of the Mask' and 'Exorcist: The Beginning'and was quite successful in creating several pieces of branded intellectualproperty, such as the now famous 'Commander Safeguard' for Unilever,which featured in the first Pakistani 3D animated educational series focusedon health and hygiene4 and was later adapted in a number of countries,

including Mexico and China, among others.

Sharp Image is another leading player in the industry, providing a rangeof animation services, including advertising, character animation, 3D assetdevelopment, and visual effects services such as architectural and medicalvisualisation, etc. More recently, Sharp Image has moved to a greater focustowards its own intellectual property and character development and haslaunched branded content such as Mi l ka tee r (for TetraPak) andCOCOMO (for a TV short) – both winning international awards andrecognition. The company has also been the first to develop Arabiccharacters such as gulgul (a camel).

Over the years, Sharp Image has established a reputation for producingquality creative content, and has developed its own Animation Academyto train new talent. A qualification from Sharp Image’s Academy isbecoming a seal of approval for professional training sought by otherplayers within the industry. Sharp Image hopes to considerably expandthis facility to be able to train more widely for its own and the industry’sneeds. And, with several years of experience to its credit, Sharp Image isready to take on bigger challenges.

“The key to ultimate success, however,” says Tahir Moosa, the co-CEO ofSharp Image, “is finance. Over the years, we have developed the capabilityto handle projects of any amount of complexity and technical sophistication,and we have delivered quality with consistency. Developing high-quality3D content requires considerable investment in human capital andequipment. It takes about 100-150 people working over 18 months todevelop 26 episodes of 22-minutes each for a season. This amounts toan investment of $5-8 million per series.”

Industry insiders suggest that a 22-minute episode of 3D animated contentthat costs $360K to develop in the US can be produced for $90K in Indiaand around $75K in Pakistan. Increasingly – and despite the labour arbitrageadvantages in relatively low-cost countries – even major internationalstudios demand cost and revenue sharing models as conditions for workingwith animation facilities oversees. Sharp Image seeks to embark upon amajor effort to bring in the financial investment necessary to enhance theprofile of its work.

In creating a CGI and animation industry, Pakistan can build upon its richlocal tradition of “story telling.” There are also considerable opportunitiesfor locally-developed content drawing from this tradition (mythical tales

and characters such as Dastan-e-Ameer Hamza, Beer Bul, Alif Laila,and Umro Ayyar, etc.) that can be designed for the local market. Dueto the its religious, cultural, and linguistic proximity, Pakistan’s CGI and

animation industry is also well-positioned to capitalise on the Arabiclanguage Gulf, Middle Eastern, and North African market opportunities.

Mobile Nation – The unfulfilled promise of thedomestic market

While Pakistani companies have made significant inroads into the globalmobile applications and gaming market, their exploits on the domesticfront – despite significant mobile penetration – have been quite limited.This is explained by considerably less domestic market penetration ofsmart phones, lesser purchasing power of consumers, and low levels ofliteracy in the society. At just over US$ 2.5 (estimated in 2010), the AverageRevenue Per [mobile] User (ARPU) in Pakistan is one of the lowest in theworld and is declining4 although penetration continues to increase, hitting79% in 2010. In 2009, Pakistan ranked fourth in the world, behind thePhilippines, the United States, and the United Kingdom in terms of SMS

traffic5. According to a report released recently by the PakistanTelecommunication Authority (PTA), Pakistanis sent 151.6 billionmessages in the calendar year 2009.6

These numbers represent both a set of challenges and anopportunity for mobile software and application designersfocused on the domestic market. In the short to medium

term (2-5 years), perhaps, the market will continue to focus on tryingto get more value addition from the non-smart phone subscriber base.This will be a challenging undertaking, as the largest mobiletelecommunications providers compete in an internecine price war, inwhich the happily-switching consumer has been the major beneficiary.

"GenITeam helped us develop a productthat helped us attain market leadershipin the mobile educational category. Ourcustomers, senior management andinvestors are extremely happy withGenITeam's professionalism."

- Watermelon Express

Page 7: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

The “value” in Value-Added Service (VAS) offerings of these telcos haslargely been in the form of ringtones, songs, mobile alerts, etc. Up untilnow, the telecommunications infrastructure has been unable to supportmobile TV and other forms of live-streaming content.

“In the very short run”, says Umar Saif, “SMS is the key to riches in thedomestic market. The potential of something as simple as an SMS hasnot been fully realised in the domestic market.” Umar is a Professor ofComputer Science at the Lahore University of Management Sciences(LUMS) and the CEO of SMS-all (formerly known as ChOpal.pk) a grouptext messaging service that has sent more than 3 billion SMS so far. SMS-all buys SMS in bulk from leading telcos and provides its 2 million plussubscribers the opportunity to communicate with self-defined groupsthrough this medium. A mobile version of eGroups that offers a greaterrange of possibilities than Twitter, SMS-all has been fairly successful indeveloping traction. “The key challenge”, says COO Idrees Butt, “is guidingand managing the networks and monetising the interactions that we havegenerated”. The company has had a fair bit of initial success in theadvertising and corporate realms.

A small number of companies that have made inroads into this market,however, seem to have done fairly well. Perhaps the first company toprovide value-added services to the domestic mobile subscriber base wasAKN Messaging Technologies (AKN MTECH) – a TMT Ventures companylisted on the Kuala Lumpur Stock Exchange (KLSE) – that launched thefirst SMS-based secure mobile payment system in Pakistan in 20047. AKN

Messaging Technologies – now known as M3 Tech – has alsoacquired licensing rights to Asia’s largest mobile

content library (comprised of Pakistani – Urduand regional languages – Bollywood,

Western, Arabic, Malay, Chinese and Thaicontent).

Another industry player, ConvergeTechnologies has done well indeveloping platforms – mobile, IVR,RIA, and interactive digital kiosks – and

content across a range of Pakistani,Bollywood, lifestyle, and devotional

themes, and has since served allmajor telcos in the country.

Converge has also developedproprietary content serving

platforms (C-Serve) with specialistmodules to connect and serve

different digital channels.

Increasingly, though, a more discerning consumer is emerging, and isdemanding greater variety, capability, and quality in value-added servicesavailable to the domestic market. Adnan Lawai, the founder of Folio3,believes that this class of consumers – although limited in numbers – willhave the purchasing power equivalent to any similar consumer segmentin some of the more developed small-sized economies, such as the EasternEuropean countries of Poland or Hungary. “We need to forget about the60-70 million figure and focus our energies on creating content andapplications for the 2-3 million target market. If we can somehowknow the needs and preferences of this market better andsell to them, we’ll probably do as well as any small-sizedEuropean or Middle Eastern country,” he says.

While these alluring possibilities are just aroundthe horizon, in the short-to-medium run, thedomestic market is somewhat restricted by anumber of constraints. It will not remain like thisforever. Some telcos are already playing with theidea of VAS, although their success in attractingtalented programmers and applicationsdesigners has been limited by what they arewilling to share. One of the leading telcos isplanning the launch of its very own app store.Bigger changes will require a paradigm shift intheir thinking to appreciate the market’s potential.This, then, is an opportunity for a visionary investorwith somewhat deeper pockets to advance into thefastest growing mobile markets in the world.

The party you don’t want to miss

Pakistan’s mobile, gaming, and animation industry presents the pictureof a new frontier for the immense creative energies and aspirations of thisnation’s hundreds of thousands – if not millions – of talented youth. Likemost frontier endeavours, it offers substantial returns in exchange forsome risks. Increasingly, the mobile opportunity is being seen byGovernment planners and industry leaders as something that the countrycan ill-afford to miss out on.

At a recent event at the country’s leading art school, Zia Imran – theManaging Director of Pakistan Software Export Board (PSEB) and the ChiefMarketing Officer for Pakistan’s IT industry – talked about the need to takea plunge in this exciting new world of possibilities, of breaking old mouldsand doing the extraordinary. He urged young art students to shun theirdreams of cosy jobs in creative departments of multinational brandagencies and take the road less travelled. PSEB is planning an

"The Folio3 team has consistentlyexceeded our expectations. It felt as if wewere working with an onshore team. Itwas their ability to understand our needsand keep us engaged throughout theentire process that has resulted in anexceptional product and a valued partner."

- Product Manager TRUETRAC

Page 8: Pakistan Mobile Gaming and Animation Industry an Industry Capability Profile 3 May 2011 0

incubation “boot camp” that will expect its attendees to develop andmarket a mobile application or game within a six-month time-frame.

Other government agencies and industry bodies, such as the GameDevelopers Group of Pakistan (GDGP) and Pakistan Software HousesAssociation of the IT and ITES Companies (P@SHA) are similarly payingattention.

Jehan Ara, the President of Pakistan Software Houses Association (P@SHA)sees promise in the magical world of digital media and entertainment.“When I look at the kind of work that startups in the mobile, gaming andanimation space in Pakistan have been able to produce despite immensechallenges, it excites me and re-affirms that we are indeed on the vergeof a major surge into an exciting new world of opportunity. Fortunately,Pakistan has no shortage of young people. Some have already embarkedon this journey. They are well on their way. All we have to do now is providethem with the ecosystem and the support network that they need to flourish,to scale and to grow into global companies,” she says.

“Mobile applications, gaming, and animation provide exciting opportunitiesfor the country…”, says Zia Imran of Pakistan Software Export Board. “Ifyou want to change the world, we are throwing a party. That party startstoday.”

The party has just gotten underway and it is OPEN TO ALL –both inside and outside the country…

References1.PSEB, 2010, Pakistan IT Market Study 2010, Pakistan Software ExportBoard, Islamabad2.GameView Studios’ Official Blog: http://gameviewstudios.blogspot.com/3.http://pasha.org.pk/mindstorm-studios-develops-official-game-for-icc’s-cricket-world-cup-2011/4.Research and Markets forecast quoted athttp://telecompk.net/2008/11/08/forecast-of-lower-arpu-higher-penetration-for-pakistan-mobile-industry/5. http://tribune.com.pk/story/103597/much-to-say-the-text-republic-of-pakistan/6.http://tribune.com.pk/story/105395/text-messages-prime-source-of-revenue-for-cellular-operators/7.http://telecompk.net/2009/08/12/sms-mobile-payment-pk/

DisclaimerThis document is prepared by Technomics International’s Brand Intellect ™ Servicefor Pakistan Software Export Board (PSEB). It provides factual assessment and “bestjudgement” analysis of an emerging, dynamic, and fast changing industry. It is notintended as a sole means of advice for making investment decisions and neither PSEBnor its Consultant assumes any responsibility for the same.

Technomics International

93 Century CourtWoking, GU21 6DRUnited Kingdom

Telephone: +44 1483 901916 | Fax: +44 1483 901925Email: [email protected]

Technomics International is a boutique strategy, policy,and media advisory company. Technomics Media'sBrand Intellect™ Services provide a unique approach tocreating differential brand identities for national,regional, and sectoral clients. Brand Intellect™ deliversbespoke brand marketing campaigns based on strategicthought leadership and specialist marketing collateral.

Pakistan Software Export Board (PSEB)

2nd Floor, Evacuee Trust ComplexAga Khan Road, F-5,Islamabad, Pakistan

Telephone: +92-51-111333666 and +92-51-9204074

Email: [email protected]

PSEB is the apex body created by the Government of Pakistan(GOP) within the Ministry of IT and Telecom (MOITT) and chargedwith promoting Pakistan's exports from IT and IT-enabled Services(ITES) industry. PSEB does this by hosting and supporting foreigndelegations to conferences and events, match-making andnetworking of Pakistani companies with foreign partners andclients, and supporting international marketing and image-buildingactivities.

To learn more about Pakistan's IT Industry, please visit the ITIndustry Portal at http://www.IT.org.pk

Pakistan Software HousesAssociation (P@SHA)

Suite 310, Business CentreBlock 6, PECHS,Karachi, Pakistan

Tel: +92 21 3541 8121 & +92 21 3430 4796

Contact: Jehan Ara, PresidentEmail: [email protected]

P@SHA is the representative association for Pakistan’s IT andIT-enabled services industry. It is a platform for promoting, protectingand developing the software industry in Pakistan. It provides a focalpoint of representation to a variety of outside agencies find waysto tackle issues confronting member companies, and providesadvocacy for the advancement of Pakistan’s IT industry.

To learn more about Pakistan’s IT Industry, please visit P@SHA’swebsite at http://www.pasha.org.pk