Despite the 28 per cent goods and services tax (GST) imposed on online gaming, Games24x7, a gaming unicorn, is investing heavily in product enhancements to boost user engagement and retention. The company aims to keep users engaged with fresh offerings, including fantasy sports, rummy, and poker games.
Co-founder and co-CEO Bhavin Pandya stated, “We want to ensure that what we are offering is fresh. So, product enhancements are certainly something that we are working on.”
The company is exploring cross-monetisation opportunities to maximise user lifetime value (LTV).
“The idea is to cross-monetise to as many users as we can… If we have other games like rummy and poker on our platform, we can keep players engaged while the cricket match is also going on. This has served us really well and allowed us to maximise user LTV,” Pandya said.
Games24x7’s fantasy sports platform, My11Circle, has seen “phenomenal” returns, with a 60 per cent increase in revenues and team creations 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 efforts.
In February this year, My11Circle emerged as the official partner of the IPL, bidding Rs 125 crore annually for a period of five years.
“IPL 2024 was phenomenal for us. We recorded an over 60 per cent increase in revenues and the number of teams created on our platform, compared to last year. For My11Circle, the IPL is a top priority for our marketing efforts, and nearly half of our marketing spends are focused around the tournament,” he said.
Games24x7 is one of three gaming unicorns—companies valued at over $1 billion—in the country, aside from Dream11 and Mobile Premier League (MPL). The company currently has a user base of over 120 million players.
On achieving profitability, Pandya said: “If we continue to grow at the pace that we are growing at, and do better, then profitability is just an outcome… We want to achieve profitability as soon as possible and hopefully, in the very near future, we will be able to get there.”
Games24x7’s revenue from operations surged 70 per cent to Rs 1,988 crore in FY23. At the same time, it trimmed 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 be seen only in the FY24 results.
Indian real-money gaming (RMG) firms are currently reeling from a 28 per cent blanket tax on online gaming imposed by the Centre on October 1, 2023.
According to Pandya, the move has set the Indian gaming industry back 12-18 months, and clarity on retrospective tax and clear regulations are a pressing need for the gaming sector.
“The best outcome would be that the government issues a notification that they will not go after companies for retrospective tax,” Pandya said.
Meanwhile, Games24x7 is scouting new areas of investment.
“We are always looking for synergies and partnerships in terms of new-age areas that either we could use or other people can benefit from. Nothing has really taken full shape yet, but conversations are ongoing,” Pandya said.
Despite the GST burden, Pandya says that the company is well capitalised and does not need funding.
“One of the best times to raise funds is when you do not need them. So, we are constantly interacting and the conversation is open. There is no set agenda as of now. But if there is interest, we are happy to entertain it,” he said.
Going forward, the company’s primary mode of expansion will be to acquire more players for its existing games and work on new games based on their permissibility. The gaming major is not planning to expand to international markets.
First Published: Aug 14 2024 | 4:44 PM IST
