"BANGALORE, India -- Rajesh Rao, a 34-year-old businessman, spends a good part of his workday playing video games on his mobile phone. He also insists his new employees spend their first few weeks doing the same. He's not a flippant amateur refusing to grow out of his childhood. Instead he's part of a small breed of entrepreneurs trying to make India the world's studio for developing games on mobile phones, computers and consoles.

They're already attracting big names and big money, leveraging the same advantages that India's software industry uses: abundant programming skills and low wages. They compete for outsourced game development work from the West while also creating their own games.

But while multinational game developers such as Sony Corp., Codemasters Software Co., Atari Inc. and Microsoft Corp. are rushing to offshore development work, Indian companies find it hard to hire creative programmers who understand and enjoy games.

"Very few Indians grow up playing games, because they're too busy with studies and thinking about their future," Rao said. "We let our new employees just play games for the first two or three weeks, so that they will get hooked."

U.S. video game sales alone are estimated at $10 billion a year, but the cost of developing new games for console systems in America can surpass $10 million.

That's why analysts say India is likely to become an attractive option for at least part of the process, such as art design. Cost savings in India could amount to 40 percent, industry insiders say. For mobile phone games, the savings could be up to 50 percent, given the work required to achieve compatibility on multiple devices." [more]