Despite the 28 percent Goods and Services Tax (GST) levied on online games, gaming unicorn Games24x7 is investing heavily in product improvements and exploring cross-monetization opportunities to boost user engagement and retention.
The company aims to keep users engaged with new offerings including fantasy sports, rummy and poker games.
“We want to make sure that what we offer is fresh. So we are working on improving the products,” said co-founder and co-CEO Bhavin Pandya.
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 lifetime value of the user,” Pandya said.
Games24x7’s fantasy sports platform My11Circle has seen “phenomenal” results, with a 60 per cent increase in revenue and team building during 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 Indian Premier League (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 three gaming unicorns (companies valued at over $1 billion) in the county, alongside 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.
Games24X7, which also offers RMG, has also faced setbacks as a result of the new tax.
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 terms of new areas that we can leverage or that other people can benefit from. Nothing is 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 permissible. The major gaming company has no plans to expand into international markets.
First published: August 14, 2024 | 16:44 IS
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