Diversified gaming and sports media firm Nazara Technologies announced on May 9 that it will increase its majority ownership in mobile gaming subsidiary Nextwave Multimedia from 52.38 percent to 71.88 percent, as the firm looks to scale up its freemium gaming business.
According to a stock market filing, Nazara Technologies is buying a 19.5 percent stake from Nextwave Multimedia's existing founding shareholders PR Rajendran, PR Jayashree and R Kalpana for Rs 15 crore as part of this transaction.
It also noted that the firm has an option to acquire the remaining stake held by Nextwave's founding shareholders within a period of 15 months.
Chennai-based Nextwave Multimedia predominately focuses on developing casual and multiplayer mobile games in the sports genre.
Its flagship title is World Cricket Championship (WCC), which claims to be the largest mobile-based cricket simulation game. It has subsequently released two sequels so far - WCC2 and WCC3. The firm claims to have clocked over 100 million downloads across mobile platforms in the past seven years.
Nazara Technologies acquired a majority stake in Nextwave Multimedia in 2018. The company said this transaction will help them strengthen its offerings in the virtual interactive sports genre in India and other emerging markets.
“WCC has established itself as the leading mobile cricket game franchise globally with millions of active gamers and has developed a very high-end cricket simulation engine on top of which many new games can be launched," said Nazara Technologies founder Nitish Mittersain in a statement.
"We believe the potential of this popular franchise is significant for us in the years to come and are happy to have had the opportunity to increase our ownership. We will continue to work closely with the team to provide an enhanced gaming experience to cricket enthusiasts all over the world," he added.
Nextwave Multimedia posted total revenue of Rs 23.7 crore for the year ending March 31, 2023 (FY23), a 26 percent increase from Rs 18.8 crore in FY22, Nazara Technologies said in its FY23 earnings presentation, adding that the topline growth was driven a 38 percent increase in its advertising revenue. Advertising accounted for 79 percent of the company's revenue in FY23.
The firm reported an EBITDA of Rs 6.2 crore for FY23, up 72 percent from 3.6 crore in FY22, driven by ad optimisation and cost control.
WCC titles are played by around 8.72 million monthly active users as of Q4-FY23, with 36 percent players in India and the remaining 64 percent from International markets. The titles also clocked about 1.45 million daily active users for the March-ended quarter (Q4-FY23).
That said, the freemium gaming business currently accounts for a miniscule 2 percent of Nazara Technologies' FY23 revenue.
Revenue milestone in FY23
Overall, Nazara Technologies surpassed key milestones of Rs 1,000 crore in annual revenue and Rs 100 crore in EBITDA in FY23.
It reported revenue of Rs 1,091 crore in FY23, a 75 percent increase from Rs 621.7 crore in FY22. EBITDA was at Rs 109.7 crore in FY23, up 16 percent from Rs 94.6 crore in FY22. Profit after tax grew by 21 percent to Rs 61.4 crore in FY23 from Rs 50.7 crore in FY22.
The e-sports segment, which includes Nodwin Gaming and Sportskeeda, continues to be the biggest vertical for Nazara Technologies, accounting for about 49 percent of its FY23 revenue.
The segment posted a 75 percent revenue growth to Rs 531.5 crore in FY23, driven by a 84 percent increase in Nodwin Gaming and a 55 percent increase in Sportskeeda.
In terms of geography, India contributed about 40 percent of the company's topline in FY23, while North America accounted for 42 percent and the remaining 19 percent came from other international markets.
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