Vernacular skill gaming platform WinZO saw its revenue from operations surge 182 percent to Rs 687 crore for the financial year 2023, from Rs 242 crore in FY22, driven by significant growth in microtransactions due to increased consumer adoption.
The company also posted a profit before tax of Rs 120 crore for FY23, as compared to a loss of Rs 120 crore in FY22.
This number, however, excludes the impact of a loss of Rs 836 crore on account of fair value treatment of CCPS (Compulsorily Convertible Preference Shares) as a liability, instead of equity as mandated by IndAS accounting methodology.
WinZO recently transitioned its accounting methodology from IGAAP (Indian Generally Accepted Accounting Principles) to IndAS (Indian Accounting Standards). If the impact is included, the company has incurred a loss of Rs 710 crore for FY23.
It's worth noting that these financial numbers are before the 28 percent goods and services tax (GST) regime imposed by the government on the real-money gaming sector, which became effective on October 1, 2023. Before this, real-money gaming platforms paid 18 percent GST on the platform fees, also known as Gross Gaming Revenue (GGR).
The new tax rates are expected to significantly increase the tax burden of companies in the sector, thereby hurting their revenues and profitability in the future. Skill-based gaming is currently one of the rare sectors in India's digital economy that has multiple companies with sizeable profits.
Read: India's real-money gaming sector had a rough 2023. Will 2024 be any better?
Started by Paavan Nanda and Saumya Singh Rathore in 2018, WinZO enables developers to host their games on the platform and earn revenue through a microtransaction-based monetisation model ranging from Re 1- Rs 10, instead of the traditional in-app purchases and advertisement-based models.
WinZO claims to have a portfolio of over 100 games spanning various genres, including strategy, sports, casual, card, arcade, racing and action, and board games across 12 languages such as English, Hindi, Gujarati, Marathi, Bengali and Bhojpuri.
The startup said its platform currently facilitates over four billion micro-transactions per month from over 175 million registered users.
WinZO is also doubling down on a community-led distribution strategy, leveraging micro-influencers, housewives, and vernacular gaming experiences to market games available on its platform, instead of platforms such as Google and Meta.
The company forayed into Brazil in October 2023, in a bid to diversify their operations. At the time, Nanda had told Moneycontrol that the firm's global expansion was "accelerated on the backdrop of the GST related developments".
WinZO has raised a total of $100 million across multiple financing rounds from investors such as Griffin Gaming Partners, Maker’s Fund, Courtside, and Kalaari Capital until now.
Similar to WinZO, other real-money gaming firms have also witnessed significant growth in FY23.
Dream Sports, the parent firm of fantasy sports major Dream11, saw its revenue from operations jump 66 percent to Rs 6,384.49 crore for the financial year 2023, from Rs 3,841 crore in FY22. Profit after tax grew by 32.4 percent to Rs 188 crore in FY23 from Rs 142 crore in FY22.
Mobile Premier League (MPL)'s overall revenue grew to $104.63 million in FY23 registering a 63 percent increase from $64.2 million in FY22. The company's revenues from the Indian market grew by 23 percent to Rs 521.8 crore ($64.7 million) in FY23 from Rs 424.4 crore ($57.2 million) in FY22. Losses have also narrowed sharply by 70 percent to $37 million in FY23 from $194.5 million in FY22.
Gameskraft also posted a total profit of Rs 1,061.86 crore on revenues of Rs 2,732.11 crore for FY23, an improvement from Rs 930.5 crore profit on revenues of Rs 2,153.24 crore in FY22.
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