Nazara Technologies plans Web3 gaming foray through cricket

Mobile gaming and sports media platform Nazara Technologies, which is backed by ace investor Rakesh Jhunjhunwala, plans a foray in the Web3 space through its freemium gaming business.

Web3 is said to be the next iteration of the internet, which will be decentralised and run on the blockchain.

Nazara Technologies chief executive Manish Agarwal said on May 16 the company was working on creating a cricket offering in Web3 "leveraging its strengths" from its subsidiary Next Wave Multimedia.

"We believe that the massive amount of community cult following that this IP has with the proven game engine model, foray into Web3 can be very successful. Given that some of the new crypto native developers do not have a proven game engine or proven communities, it kind of puts us into a pole position to really capture the industry" Agarwal said during the company's earnings conference call.

Next Wave Multimedia's flagship title is World Cricket Championship (WCC), which claims to be the largest mobile-based cricket simulation game. It has released two sequels so far—WCC2 and WCC3.

The company said these games were played by about 9.8 million monthly active users on a combined basis for an average of 42 minutes a day in the March quarter (Q4-FY22) and clocked about 100,000 organic downloads without any marketing spends.

Agarwal said the company was setting up a blockchain team to "look at what kind of form and shape they will be doing it" without sharing details.

With growing crypto adoption in India, blockchain and non-fungible token (NFT)-based gaming firms are gaining steam and is expected to be one of the key trends in the sector in 2022, Moneycontrol reported on December 24. This move could also lead to better monetisation opportunities for game developers.

"Monetisation on games has been a challenge in the India market, even in a freemium model, except for a few top grossing games. The in-app purchase (IAP) conversions has been low and eCPMs (effective cost per thousand impressions) have been fairly low. I think web3 is providing a completely different set of monetisation opportunities with potentially higher ARPU (average revenue per user)" Nazara Technologies founder Nitish Mittersain recently said at an industry event.

Web3 gaming rush

Among others eyeing the Web3 gaming space include Dream11 parent Dream Sports that led $120 million funding into Cricket NFT platform Rario through its corporate venture and M&A arm of Dream Sports.

nCore Games recently raised $10 million funding to expand its properties into metaverse and NFTs as well as launch new games in the Web3 and play-to-earn space.

In February, WazirX cofounder Siddharth Menon teamed up with Pune-based game development firm SuperGaming to launch Tegro, a Web3 game ecosystem marketplace.

M&A focus on freemium business

Agarwal said the freemium segment would be its biggest focus in terms of its mergers and acquisitions (M&A) strategy this year.

"We will be looking at game dev (developer) studios who are doing in the vicinity of $3 million -$5 million and have high growth potential. Like we have mentioned before, this segment needs to be a much larger and bigger segment" he said during the call.

Nazara's freemium games business reported a revenue of Rs 21.3 crore for FY22, registering a 9 percent growth from Rs 19.5 crore in the previous fiscal. This was aided by a 17 percent year-on-year increase in its in-app revenues.

The segment, however, represents only 3 percent of the company's topline, which was at Rs 621.7 crore for the fiscal FY22.

In an earlier interaction with Moneycontrol, Agarwal stated plans to add more competitive multiplayer games to its portfolio that comprises only cricket.

In recent months, Nazara Technologies has backed a couple of venture capital firms with an active Web3 and gaming portfolio such as Bitkraft Ventures and Griffin Gaming Partners, enabling them to become a limited partner in these firms.

The company said it would leverage these investments for investment opportunities into "highly sought-after founders/ companies" as well as secure deal flow for future mergers and acquisitions from the current portfolio of these funds as well as inflow of deals coming to them.