Despite the 28% Goods and Services Tax (GST) levied on online gaming, Games24x7, a gaming unicorn, is heavily investing in product innovations to increase user engagement and retention. The company intends to keep consumers interested with new offers such as fantasy sports, rummy, and poker games.
Bhavin Pandya, Co-founder and Co-CEO, commented, "We want to make sure that what we give is innovative. So, product advancements are definitely something we are focusing on. The company is looking into cross-monetization potential to increase user lifetime value (LTV).
"We aim to reach as many users as possible through cross-marketing. If we have additional games on our platform, such as rummy and poker, we can keep gamers interested while the cricket action is ongoing. This has served us quite well and allowed us to maximize user LTV," Pandya stated.
Games24x7's fantasy sports platform, My11Circle, has achieved "phenomenal" returns, with a 60% rise in revenue and team creations during the Indian Premier League (IPL) 2024. The company is focused on expanding its fantasy sports platform and has dedicated roughly half of its marketing budget to IPL-related initiatives. My11Circle became the IPL's official partner in February of this year, bidding Rs 125 crore every year for the next five years.
"IPL 2024 was fantastic for us. We saw a more than 60% growth in income and the number of teams formed on our platform compared to last year. The IPL is a high priority for My11Circle's marketing activities, with roughly half of our marketing budget allocated to the competition," he stated.
Games24x7 is one of the country's three gaming unicorns—companies valued at more than $1 billion - along with Dream11 and Mobile Premier League (MPL). The company currently has more than 120 million players. Pandya stated that gaining profitability is just a byproduct of continued growth and improved performance. We aim to become profitable as quickly as possible, and we hope to do so in the near future."
Games24x7's revenue from operations increased by 70% to Rs 1,988 crore in FY23. At the same time, it reduced its losses by roughly 30% to Rs 199 crore, according to records with the Registrar of Companies. However, the impact of GST will only be visible in the FY24 figures.
Indian real-money gaming (RMG) enterprises are now dealing with a 28% blanket tax on internet gambling imposed by the Centre on October 1, 2023. According to Pandya, the action has thrown the Indian gaming industry back 12-18 months, and clarity on retrospective tax and clear laws are urgently needed in the gaming business.
"The best outcome would be that the government issues a notification that they will not go after companies for retrospective tax," says Pandya. Meanwhile, Games24x7 is exploring fresh investment opportunities.
"We are continually seeking for synergies and partnerships in new-age areas that we or others can benefit from. Nothing has really taken shape yet, although discussions are ongoing," Pandya explained. Despite the Goods and Services Tax burden, Pandya claims that the company is well-capitalised and does not require cash.
"One of the most effective times to generate donations is when you don't need them. So we're always interacting, and the conversation is open. There is no established agenda as of yet. But if there is interest, we are happy to consider it," he said.
Going ahead, the company's major form of expansion will be to add additional players to its existing games while also developing new games based on their feasibility. The gaming company does not want to expand into overseas markets.
