With the gaming industry projected to grow to $14.6 billon by 2004 can Indian companies in the software sector afford to stay behind and overlook opportunities?

The answer is obviously no. India’s number one, and the world’s fifth-largest, entertainment graphics major, Pentamedia Graphics, has joined hands with Purple Drop Inc, a Silicon Valley-based interactive media start-up to take advantage of the growing demand for entertainment-based software.

Founded by Mr. Ashok Desai, a 14 year veteran of Silicon Graphics and a former employee of Pentamedia Graphics Ltd., Purple Drop is currently producing next generation graphics for games, entertainment, marketing and educational media. Its team comprising of artists, producers and engineers develop and use emerging graphic design and production technologies, from 2D and 3D animation techniques to CGI and film SFX, to provide an expansive offering of services and products. Located in the world-renowned centre of technology, Silicon Valley, Purple Drop specialises in end-to-end graphics solution provided through market driven services, products and distribution strategy.

Pentamedia has invested $4 million in Purple Drop, in the form of seed funding and has also transferred a core team of trained professionals to Purple Drop. Talking to domain-b on the motives behind making this investment Dr V Chandrasekaran, chairman Purple Drop Inc and chairman and chief executive, Pentamedia Graphics, said, "This alliance will enable us to further broaden our base in the entertainment and graphics industry. Though returns on this investment may not be much in the short term, huge gains are likely to accrue in the next two to three years."

Dr. Chandrasekaran added that this investment was part of the company’s strategy to respond to the exciting needs of the entertainment industry, where the company had already forged many alliances in the recent past. He said Pentamedia’s involvement in Purple Drop is a proof of its belief that the time is right to dwell deeper into the high-end graphics industry and pursue it as a focussed entity.

Speaking to domain-b, Mr. Desai of Purple Drop said, "Time has come for India to venture into radically new business opportunities. We plan to leverage India’s inherent technology strengths as well as existing knowledge and expertise from the traditional business in entertainment and graphics and use these to chart a new paradigm for the industry in interactive entertainment and online gaming." He said gaming industry, as an interactive entertainment sector, was becoming a stepping stone for other technologies.

Unlike the traditional software Mr. Desai still the USA as a very good market for gaming industry and feels that as much as 55 per cent of the business opportunities existing in the world are there. He said the industry had support from venture capitalists and manufacturers in the USA and trillions of dollars were being poured there into creating optical fibre cable networks. In contrast, he felt that one required more power to sell in Europe.

Mr. Desai said Purple Drop would concentrate on the markets of USA, Japan and India, terming the three as "the golden triangle". Mr. Desai disclosed that he had entered into a marketing alliance with a company in Japan to help sell its products there.

Commenting on the Pentamedia investment in his company, Mr. Desai said that the former would be contributing funds and technology, two very critical factors for success. He said, "Pentamedia has very strong industry connections and very strong industry focus, all of which would help Purple Drop in generating business."

In addition Purple Drop has also managed to obtain rights to convert Sinbad and Pandavaas, Pentamedia’s two very successful graphics products, into gaming software.

Mr Desai said to begin with his company would concentrate on giving consultancy and advisory services and products would come later. He hoped his company’s turnover in the next three years would average about $ 40 million and expected margins to be reasonably good.