Despite the 28 percent Goods and Services Tax (GST) levied on online gaming, Games24x7, a unicorn gaming company, is investing heavily in product improvements to increase user engagement and retention. The company aims to keep users engaged with new offerings, including fantasy sports, rummy, and poker games.
Bhavin Pandya, co-founder and co-CEO, said: “We want to make sure that what we offer is fresh. That’s why we are working on product improvements.”
The company is exploring cross-monetization opportunities to maximize user lifetime value (LTV).
“The idea is to cross-monetise as many users as possible… If we have other games like rummy and poker on our platform, we can keep players engaged while the cricket match is going on. This has been very helpful for us and has allowed us to maximise the user lifetime value,” Pandya said.
Games24x7’s fantasy sports platform My11Circle has seen “phenomenal” results, with a 60 per cent increase in revenue and team building during the Indian Premier League (IPL) 2024. The company is focused on growing its fantasy sports platform and has allocated nearly half of its marketing budget to IPL-related initiatives.
In February this year, My11Circle emerged as an official partner of the IPL, offering Rs 125 crore annually for a period of five years.
“IPL 2024 was phenomenal for us. We recorded an increase of over 60 per cent in revenue and the number of teams created on our platform, compared to last year. For My11Circle, IPL is a top priority for our marketing efforts, with almost half of our marketing spends focused on the tournament,” he said.
Games24x7 is one of the three gaming unicorns (companies valued at over $1 billion) in the country, along with Dream11 and Mobile Premier League (MPL). The company currently has a user base of over 120 million players.
On profitability, Pandya said: “If we continue to grow at the current pace and do better, then profitability will be just an outcome… We want to achieve profitability as soon as possible and hopefully in the very near future, we will be able to achieve that.”
Games24x7’s operating revenue rose 70 per cent to Rs 1,988 crore in FY23. At the same time, it narrowed its losses by nearly 30 per cent to Rs 199 crore, according to filings with the Registrar of Companies (RoC). However, the impact of GST will only be seen in FY24 results.
Indian real-money gaming (RMG) companies are currently reeling from a 28 per cent general tax on online gaming imposed by the Centre on October 1, 2023.
According to Pandya, the move has set the Indian gaming industry back by 12-18 months and clarity on retrospective taxation and clear regulations are an urgent need for the gaming sector.
“The best outcome would be for the government to issue a notification that it will not pursue companies for retrospective taxes,” Pandya said.
Meanwhile, Games24x7 is exploring new areas of investment.
“We are always looking for synergies and partnerships in next-generation areas that we can leverage or that other people can benefit from. Nothing has been finalised yet, but discussions are ongoing,” Pandya said.
Despite the GST burden, Pandya says the company is well capitalised and does not need funding.
“One of the best times to raise funds is when you don’t need them. That’s why we interact constantly and the conversation is open. There is no set agenda for now. But if there is interest, we will be happy to accommodate it,” he said.
In the future, the company’s main mode of expansion will be to acquire more players for its existing games and work on new games as per their permissibility. The major gaming company has no plans to expand into international markets.
First published: August 14, 2024 | 16:44 IS
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