MPL cofounders Sai Srinivas (L) and Shubh Malhotra
Indians love playing games on mobile phones, and home confinement during the pandemic has accelerated the trend.
This has triggered a boom that helped Mobile Premier League (MPL), which joined India's startup unicorn club on September 15, see its valuation multiply five-fold to $2.3 billion from $450 million a year ago.
The Bengaluru-based startup’s platform hosts virtual tournaments across more than 70 games and claims to have over 85 million users across India, Indonesia and the United States.
India has the world’s largest number of game downloads, estimated to be 825 million in August 2021, or 17.6 percent of total worldwide downloads, according to app intelligence firm Sensor Tower. KPMG expects India’s Rs 13,600 crore gaming market to jump to Rs 29,000 crore in four years.
Sai Srinivas, a second-time entrepreneur, aims to make MPL the underlying platform for people to play competitive tournaments in any game
In an interaction with Moneycontrol's Vikas SN and Chandra R Srikanth, Srinivas talks about MPL's global expansion strategy, keeping its content relevant, implications of the recent Tamil Nadu verdict with respect to skill-based real money games and the war for tech talent among others. Edited excerpts.
This is a huge jump in valuation. The lockdowns and the pandemic-led internet adoption obviously helped, but will this pace of growth continue, or would you bank on foreign markets to deliver the same pace of growth for you?
I think what the pandemic has shown to the investor community is the potential that the India market has, and how big the India market actually can be and how much adoption pandemic has driven in terms of digital consumption in our country.
Is this kind of growth going to happen the next year and the year after? Probably not, I mean, it would be foolish of us to assume that since external circumstances are changing dramatically. It's not going to be the same kind of growth.
That being said, a lot of users who have now tried gaming for once are familiarized with it. So, you might not be able to grow 100% year-on-year, but you will still be able to deliver meaningful 40-50% growth year-on-year, which, honestly, at the scale that some of these companies are insane. If you look at the global index, there are very few companies which actually can compound at 25%-30% year-on-year for the next 10 years. That is massive growth.
As a platform, our goal is to also bring in more different kinds of gaming content. As of today, we focused only on particular kinds of games. But over the course of the next five to six months, we will be launching original titles in India.
Outside of India, a significant amount of growth is going to come from other geographies. For example, the US is the largest gaming market in the world and just out of the two months that we've been there, we've seen incredible early results and it wouldn't surprise me if in the near future, the US as a market will probably surpass India for us.
Growth just doesn't really mean growth in India or in one category. It's also important that we look at growth holistically and growth at the pace at which you are. If you're a $10 million revenue run rate, growth of 100% means $20 million, right? But if you are at $100 million revenue run rate growth of 40% means $140 million. But in absolute quantum that is way higher than the previous growth rate. So that's how I view it.
Some of the larger growth investors across the world also see that. What they are looking for is not breakneck growth, but predictable, meaningful growth. I think that's our focus. So we've been lucky enough to grow at a breakneck pace for the last two and a half, three years, I think we will continue to deliver great growth, but our focus also is now to make it predictable and meaningful so that the company eventually at some point in the future can be a global, publicly listed company.
How are you approaching the US market as compared to India, since it is much more mature and there is more competition?
In our business, which is competitive skilled gaming, the US actually doesn't have as much competition as India. If anything, India's ecosystem is more competent. So that's actually benefited us quite a bit.
Our product offering in the US is actually unique. There's no other platform in the US offering the amount of different games that MPL does, in that geography. That being said, our focus in the US also is to ensure that we build and provide games, which are more attuned with the customers there.
For example, Bingo is a very popular game in the US, it's not popular in India, right? Whereas in India, Carrom is very popular. So, our focus is primarily on providing the platform options that we've done in India but with the games that customers in the US will enjoy.
Considering that you are in casual gaming, how do you keep your content relevant, since customers have a lot of choice?
That's precisely the reason why we are not a gaming company as much as we are a competitive gaming platform.
People don't talk about Farmville, today, but people back then, and today, still talk about PlayStation and Steam. So our goal is to fundamentally be that for mobile. It's to be the destination where people come to play competitive tournaments in any game of their choice.
So, we're not necessarily focusing on specific games, our focus is to be the underlying platform. So if you're able to build that, then you in a way mitigate that risk, which we spoke about. But to be honest, it will take us a little longer to get to that level, we are probably 20% or 30% there. So hopefully in the next two, three years, we will get there and achieve that potential.
Has your way of distribution changed? You are not on the Play Store but you are still on the App Store. So how do you manage the friction of getting people to download the app in the US and India?
In India, unfortunately, Google has its own rules, which are not consistent with the laws of the country. So, we continue to distribute outside of the Play Store and that's something we've become very good at. Hopefully, in the near future, as and when some of the policies of these platforms become more aligned with the laws of the land, hopefully, we will also be able to distribute on some of these platforms.
But in other parts of the world, in the US, especially, we distribute on the App Store. And the US is an Apple heavy market. On Android, we distribute on Samsung's app store. Samsung has a significant penetration in terms of what the Android market is in the US. People can also come and sideload our app like they do in India.
What are the trade offs between being on the Play Store and outside. You obviously don't have to pay the commission but it also means that you will have an increased cost of acquisition, be it increased marketing or incentivizing people to download the app. Can you give more color on this?
There are two gaming unicorns in this country. Both of them are not on the Play Store. It is kind of ridiculous that this is the state of affairs.
It's also very apparent that the only thing the Play Store provides is trust. They don't provide any security. Just look at the number of apps or malware that is there in these stores. So it's only trust, when you're downloading from Play Store, you know what, this app is a good app. That's it. But as a company, if you are able to build that trust with your customers, and it takes a little longer for sure. It's not easy in the early days. But when you do build that trust, eventually customers will come to you, whether you're on the Play Store, or you are off the Play Store. And it's just a matter of time before people realize this.
Some of the developments that we're seeing in the other parts of the world, I think they're incredible. Imagine how many more unicorns would be created and how many more fantastic gaming companies could come out.
What will be the impact of Apple's new anti-steering ruling on game developers?
I think it is a landmark judgement since the court fundamentally spoke about mobile gaming as a market and did not talk about mobile gaming with PC gaming and other things.
If you take any game developer today. He pays money first in user acquisition costs, no prizes for guessing who that money goes to. Then the game developer acquires customers, then the customers end up paying revenue to the game developer, and then no prizes for guessing who takes 30% of that revenue.
So if you were to do the math, the amount of money that the game developers are eventually earning out of the hard work that the game developers are doing is miniscule. It is unfair, especially for a gaming developer from India, who has to earn in rupees. How is this going to help that person compete with someone making money in euros or dollars? And that's one of the reasons why there aren't more gaming studios. There could have been a lot more.
The recent judgments with respect to skill-based schemes in Tamil Nadu. What does that mean for you? Are you hopeful of similar breakthroughs in other states as well. Any other pain points in regulation that you think need to be sorted out?
The Tamil Nadu judgment was a landmark judgment for the industry, since it set a lot of clarity. I believe it's an imperative of the industry to kind of educate and enable our legislators and regulators to explain the nuances between different kinds of games.
It's unfair to brush a game of chess, a game of pool or a game of carrom, in the same light as say games which are pure chance. I think it's just not right. That nuance is something people have started to understand and started to appreciate.
I think the more clarity that is driven in the market, and more clarity that we can bring in our regulation, it will only make the lives of all the entrepreneurs in the sector better, because it will make it easy for investors to invest without second guessing themselves or without worrying about a binary outcome or regulation being a problem. That is, I believe, the next biggest hurdle. The Tamil Nadu judgment was a great step in that direction, hopefully, in the course of the next six months to a year, we can put this particular problem statement to rest.
Can you give us a sense of your numbers? You said the US might become the biggest market in the near future?
Is your business model still a revenue-sharing model with publishers? Can you share more details on it?
As of now, it is revenue share. It depends from developer to developer. We are still far away making it a self-serve third party developer platform and we haven't opened it to everyone. It is still baby steps for us to get there.
Who owns the games on your platform?
We own the games in some cases and the developers own the games in some cases. So, there are a few where we own the entire game, because we've invested and funded and developed the game through the developer. In some instances, it's also a pure play partnership.
Are you giving any ARR numbers?
We are at north of $1.5 billion. It's seasonal hence it's anywhere between $1.5-$2 billion. Hopefully, this festive season and IPL would make it even bigger.
Would you look to use the funds raised to acquire more companies and games? I know, you are not a straight comparison with Dream11 because they are essentially fantasy sports. But would you look at perhaps a similar play, in terms of your inorganic strategy?
Dream11 is a much older company. It's been around for much longer than us. We are still a very young company. So our focus, primarily, is to ensure that we double down on the organic opportunity itself. I think we still have a few years to go, and at which point, we may make inorganic growth a priority. However, that doesn't mean we are not open to opportunities. Whenever a good opportunity does come by, we will definitely evaluate it and see if that's something we can do.
Every tech CEO or founder we've been talking to has been talking about a war for talent. So what kind of challenges do you face when it comes to hiring tech talent? Are you looking at different kinds of incentives, like BMW bikes and so on?
That is absolutely crazy right now. What happens when everybody raises a lot of money across the ecosystem is that obviously, it's going to become a bit of a bidding war. Back in the day, there was a dearth of capital and today, there's a dearth of engineers. It would be foolish of me not to acknowledge that. We face the same problems as all the other companies.
But honestly, we don't believe that BMWs or bikes are going to solve that. We believe that providing people with the right kind of problems, and the right amount of ownership in their work is key. This means you may have to let go of some people or they may be a bunch of people who might not fit well into your company. But people who do eventually fit, those guys are going to be around for a while and it's them who are going to make all the difference in your company's success. So no BMWs for sure, no matter how much money we raise.
Apart from cricket, which other emerging sports do you see opportunities in. The recent Olympics saw huge interest in non-Cricketing sports. So, what kind of sports would you like to be associated with, from a visibility perspective?
We sponsored NRAI which is responsible for the shooting contingent in the country. We sponsored the Olympics. We honestly believe the best way to bring people to physical sports is to actually let them have a digital experience first. So if you want a million people to try out shooting, it's impossible to get all of them to a shooting rink, right? It's not going to happen, you're better off, letting them all experience the digital version of the game and see who's enjoying it more and then specifically bring a few hundreds of them into a setup and then we can choose from them. I think that is something that I personally believe in and we do on an active basis. This is the reason why we are very excited about supporting as many sports as we can.
Do you plan to have an ecosystem approach for streaming esports tournaments or would you look at having your own game streaming service?
Our philosophy is very simple. We would want the content from the tournament to be broadcasted into as many different platforms as possible. So from my point of view, the more eyeballs the better. Our proprietary technology allows us to broadcast that tournament with commentary across multiple different platforms like YouTube, Twitch, and Facebook. In terms of where the people are playing, they're still playing on MPL.