Online gaming company Nazara Technologies expects the esports segment to continue its growth momentum in the second half of the financial year to make it the largest segment for the company.
Esports, which currently contributes 40 percent to the overall business of Nazara Technologies, saw 62 percent growth in revenues in the first half of FY22. This was higher than its largest segment - gamified early learning - that contributes 41 percent and saw 35 percent growth in revenues during the same period.
"Esports is expected to be a larger segment than gamified in the second half. Plus, the acquisitions have happened including OML and Publishme, which will further accelerate the growth of this segment. Esports will become the largest segment in our portfolio," Manish Agarwal, CEO, Nazara Technologies, told Moneycontrol.
In the esports segment, growth was led by Nazara's subsidiary Nodwin Gaming that saw 30 percent increase in revenue in H1 FY22 versus the same period in previous financial year.
Through Nodwin, Nazara recently acquired the gaming and adjacent IP (intellectual property) business of OML Entertainment, a media and entertainment company.
And this, Agarwal thinks will accelerate growth in the esports segment.
"The esports entertainment format will be dominant in the 14-30 age group and to increase penetration we partnered with music, comedy IP (OML) that has an affinity with this age group, and the intersection of this age group with esports is very high. So, having access to such IP now being able to drive esports is important. The YouTubers and the short video creators are driving esports. Hence, to grow esports, creators are key," he said.
OML Entertainment is known for managing some of India’s biggest gaming and entertainment creators including Tanmay Bhat, Samay Raina, Suhani Shah, among others. They are also known for owning IPs like the BACARDÍ NH7 Weekender, comedy touring properties like LOLstars and Headliners and hiphop league called Breezer Vivid Shuffle.
Nodwin with OML is planning to offer multiple esports IPs that will help attract more gamers as well as more viewers to the esports segment.
According to a 2021 report by EY on esports in India, there will be 1.5 million players, 85 million viewers and over 20 broadcasters in the country's esports market by FY25. Overall, the esports industry is expected to grow over fourfold to Rs 1,100 crore by FY25, from Rs 250 crore in FY21, the report added.
As per a separate report by Redseer, esports and streaming, while at nascent stage currently, will grow at 40 percent for next five years in India.
Currently, esports has 17 million viewers in India across multiple streaming platforms including YouTube, Facebook, Twitch and other OTT platforms, which is expected to reach 25 million by FY22.
The highest viewership record an esports tournament holds is the Hindi-language broadcast of PUBG Mobile World League East 2020 that attracted 449 thousand peak viewers.
Streaming platforms are expected to generate the largest chunk of esport revenues as the segment grows popular among youth. This will attract more advertisers who will use esports tournament viewership to gain reach and engagement with the audience.
Even for Nodwin Gaming, media rights constitute a large part of its overall revenues in Q2 FY22, contributing 61 percent.
However, there are concerns regarding the ban on online gaming in Karnataka after the State Assembly passed the Karnataka Police (Amendment) Bill, 2021 which bans online gambling and betting.
Lokesh Suji, Director, Esports Federation of India & Vice President of the Asian Esports Federation (AESF) said that while the regulation is clear, people are interpreting it the wrong way and this is the challenge the esports industry is facing.
"Karnataka ban is for any sort of wagering or betting or gambling and also playing fantasy, teen patti, rummy, poker. Online gaming is not esports as it is both online and offline. Hence, it should not be confused with online gaming. These regulations don’t apply to esports," he said.
Suji further said that most of the game developers of esports game titles don’t allow people to charge any sort of entry/registrations fee for any tournaments.
"All the esports platforms follow those guidelines already hence, there should not be any impact on the esports platforms. Esports is a sport and should be looked upon the same way, hence there should not any concerns for our esports community in Karnataka," Suji added.
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