A world-class Media City will come up in Hyderabad to promote animation and gaming, Andhra Pradeshs Minister for Information Technology Ponnala Lakshmaiah said.

The state government has allotted 30 acres of land for the project, which is expected to provide an entertainment technology-based eco-system.Gaming and animation is a key sector which is coming up and to utilize the opportunity, the chief minister has given a go-ahead for a world-class Media City in Hyderabad, Lakshmaiah said while addressing eIndia 2012, billed as Indias largest information and communication technology event.

The minister pointed out that Hyderabad is the largest film producing centre in the country. Last year out of 289 films made in India, 180 were produced in Hyderabad, he said. The Media City initiative is aimed at tapping the huge animation and gaming market, both domestic and international. The IT minister had last month said the proposed Media City at Raidurg near Hitec City would be on the lines of international media cities in Manchester, Montreal, and Dubai.

A state delegation led by the minister visited Dubai, Manchester and London from Nov 5 to 11 to gain first-hand knowledge of media cities. They held talks with the managements of the media cities and discussed various aspects of the projects. In Dubai, the four-member delegation visited Dubai Media City, Dubai Studio City and International Media Production Zone.

The global market size for animation and gaming is expected to be $80 billion and $40 billion respectively during the current year. The market for animation and gaming development (combined) in India is estimated at $1 billion. The US and the Europe remain the biggest markets for outsourcing animation and gaming related activities. Majority of the work from the US and the European markets are being outsourced to Manchester and Dubai media cities.

Talking about the IT and ITES as a whole, Lakshmaiah pointed out that Hyderabad ranks third globally in terms of cost of operations after Qinding in China and Subaya in Malaysia.

There is no secret why over 18 million sq ft has been taken on lease by various companies operating in Hyderabad. The minister said despite the apprehensions voiced in some quarters over the growth of IT sector, 150 new units were registered during 2011-12. About 60 lakh sq ft office space was occupied as against 50 lakh sq ft during the previous year.

The total office space in Hyderabad during the current year is expected to reach 20 million sq ft, a growth of 15 percent over last year. The city accounts for 12 percent of the total office space in India. Hyderabad is home to 1,200 IT companies including all top 500 global firms like Microsoft, Google, Facebook, Amazon, Deloitte, Accenture and IBM. The state has about 300,000 IT professionals and the sector is also providing 12 lakh indirect jobs.

An Information Technology Investment Region (ITIR) has also been approved in Hyderabad, which will create an employment for 15 lakh people over the next 25 years. The ITIR will be coming up with an investment of Rs.2,300 crore in external infrastructure. It will have 50,000 acres of IT and ITES area.

Three hardware clusters are also proposed in Andhra Pradesh and they would be the first under the new policy of the central government.