The Indian government's draft gaming rules will bring more clarity to the nascent but growing industry which will aid in its further growth, said Bhavin Pandya, the co-founder of skill-based gaming firm Games24x7.
"I think it'll do a lot of good for the online gaming sector. This is going to lead to more entrepreneurs coming in, more capital coming into the country, because you'll have more certainty now about things and that'll lead to different business models over the years," Pandya said in an exclusive conversation with Moneycontrol on the sidelines of The World Economic Forum 2023 annual meeting, held in the Swiss ski resort town Davos.
On January 2, 2023, MeitY proposed a self-regulatory mechanism, mandatory verification of players through Know-Your-Customer (KYC) norms and grievance redressal methods as draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 with the aim of safeguarding users against potential harm from skill-based games and also ensure these games conform with Indian laws.
Read: India's draft online gaming rules: What real-money gaming startups and industry bodies are saying
These draft regulations come at a time when India's gaming sector has seen unprecedented growth in terms of app downloads and revenue as a result of pandemic-induced home confinement in recent years, which has led to Indian consumers becoming more comfortable spending money on mobile games.
Revenue in the country's gaming sector increased from $2 billion in FY21 to $2.6 billion in FY22 and is expected to expand at a compound annual growth rate of 27 percent to $8.6 billion in FY27, according to a report by gaming and interactive media venture fund Lumikai.
"I think that the gaming boom is only now beginning because the more regulation you have, it gives a chance for more people to come into the space, both in terms of investments and entrepreneurs to build better businesses," Pandya said.
Impact of real-money state bans
The real money gaming unicorn had posted a loss of Rs 282 crore in FY22, its first-ever loss in 12 years. In comparison, the company had posted a profit of Rs 110 crore in FY21. Revenues had also declined by 24.4 percent to Rs 1,169.27 crore in FY22 from Rs 1,546.27 crore in FY21, according to regulatory filings.
Pandya said this was due to the multiple disruptions it faced in states such as Tamil Nadu and Karnataka which had suspended online games that involved the transfer of money last year, which was later overturned by their respective state high courts.
Pandya said both their brands, namely RummyCircle (online rummy) and My11Circle (fantasy sports), are witnessing "exceptional growth" due to marquee cricket tournaments such as the Indian Premier League (IPL) and the cricket World Cup.
The Mumbai-based startup is also eyeing a pan-India expansion for its rummy offerings.
"For the longest time, (Rummy) was predominantly a game that was played in the south of India but we are making major strides to take it pan-India. We've done fantastically well in the west of India, in parts of the east and also North India."
Pandya said they are also looking at new gaming formats that fit within the framework that is being laid down by the ministry. Through its unit U-Games, Pandya said they are building casual games for the Western European and North American markets from India.
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