In Hanuman: Boy Warrior, Sony’s PlayStation 2 (PS2) game, players can control Lord Hanuman from his beginnings as a powerless boy and help him gain strength over the course of the game. It’s not quite what hardcore gamers were used to, but the game caught on with kids and their parents. And that has inspired Sony to push PlayStation 3 (PS3) games, developed in India, by Indians.

Sony already has a loyal base of game developers here, who have been making games such as Hanuman: Boy Warrior for the popular PS2 platform. “The competence and technological prowess acquired through PS2 game development allow the likes of Gameshastra and Trine Games to work on PS3 games,” says Atindriya Bose, country manager, Sony Computer Entertainment.

Sony has sold 91,000 PS3 consoles and 6.75 lakh PS2s in India so far, and the market is growing. In a strategic move, the company has begun targeting parents by offering games based on Indian mythology and local sports. It’s banking on them being far more open to buying a gaming console for their children if there are acceptable games available.

“We are working on three games for the PS3 Move: one based on a traditional Indian sport, another on an imaginary sport, and the third a game based on a Bollywood movie,” says Prakash Ahuja, CEO of Hyderabad-based Gameshastra. However, he refused to reveal the names, pricing, or launch dates of the games.

Meanwhile, Mumbai-based Trine is developing a PS3 game for actor and producer Shah Rukh Khan’s superhero movie Ra.One, scheduled to release on Oct. 26. The game will be launched a month before the movie. Besides this, Trine is also developing a PS3 Move version of its Street Cricket game (now on the PS2 platform).

Once the games are completed, they will be available around the world through the PlayStation Network (PSN) or through digital discs in select markets.

THE INDIAN GAMING INDUSTRY is valued at Rs 1,000 crore at present and is expected to grow annually at 31% to Rs 3,830 crore by 2015, according to a report by the Federation of Indian Chambers of Commerce and Industry and KPMG. The worldwide spend on gaming will exceed $74 billion (Rs 3.28 lakh crore) in 2011, up 10.4% from the 2010 figure of $67 billion, estimates IT research and advisory firm Gartner.

Obviously, the opportunity for Indian game developers is huge. For Sony, there’s the added advantage of the low cost of developing these games here. “To develop a PS3 game abroad can cost $8 million to $12 million, while in India it is between $3 million and $4 million,” says Ahuja.

However, for small outfits in India (often just a couple of developers), even this cost can be too high. That’s why Sony offers to subsidise the development kits (the high-end machines used to work on creating games) for 10 or 15 developers; each of these kits cost as much as $4,000. “The entire publishing risk is borne by Sony and we work on a revenue-sharing model,” says Bose, refusing to share details of this model.

DEVELOPING GAMES FOR A platform like the PS3 is different from developing for PS2 both in scale and budget. Sangam Gupta, CEO of Trine Games, says the development cycle for the former is twice that of the latter, even with double the workforce. The PS3 console, with its high-definition output, demands far more realism in terms of how characters look and behave than other, older consoles. Things get more complicated with the motion sensing technology in the PS3 Move.

The good news is there’s no shortage of tech talent. “Kids from IITs [Indian Institute of Technology] don’t mind leaving higher paying jobs to take up game development because they are now creating games for the best platforms. For them, this is a lot more fun than the typical nine-to-five job,” says Gupta.

The road ahead won’t be easy for developers though. Sameer Desai, editor of gaming website IndianVideoGamer, says it will be a steep learning curve for Indian developers. “Developing these games is complicated, especially at the higher end. It will take quite a few years before we can compare the games they are developing with the best international games.”

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.