Games24x7's FY23 revenue touch Rs 2,000 crore; loss narrows to Rs 199.5 crore

Games24x7 co-founders Bhavin Pandya (L) and Trivikraman Thampy (R)

Real-money gaming unicorn Games24x7 saw its revenue from operations surge 70 percent to Rs 1,988 crore in the financial year 2023 (FY23), from Rs 1,169 crore in FY22.

The surge in revenues was driven by a substantial rise in usage, due to increased consumer adoption.

The skill gaming firm's overall revenues was at Rs 2,023 crore for FY23, up 71.1 percent from Rs 1,182.5 crore, as per the company's latest filing with the Registrar of Companies, accessed from the startup data firm The Kredible.

Losses narrowed by 29.4 percent to Rs 199.5 crore in FY23, from Rs 282.4 crore loss in FY22. Games24x7's FY22 loss was the company's first-ever loss in 12 years.

In an earlier interview to Moneycontrol, Games24x7 co-founder Bhavin Pandya had attributed it to the multiple disruptions the firm faced in states such as Tamil Nadu and Karnataka. These states had suspended online games that involved the transfer of money in 2022, which was later overturned by their respective state high courts.

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, as Moneycontrol previously reported.

Founded in 2006 by Pandya and Trivikraman Thampy, Games24x7 operates a portfolio of skill-based gaming platforms including RummyCircle (Online Rummy), My11Circle (Fantasy Sports), and U Games (Casual Games). The firm also recently forayed into online poker with PokerCircle.

Games24x7 primarily makes money from the platform fees it earns from players for allowing them to participate in tournaments or contests across its platforms.

The firm was last valued at $2.5 billion, when it raised $75 million funding led by Malabar Investment and participation from existing investors Tiger Global and Raine Group in March 2022. It claims to have more than 100 million users and has offices in Bengaluru, Mumbai, and New Delhi.

In March 2024, My11Circle outbid rival fantasy sports major Dream11 to become the new official partner for the popular cricket tournament Indian Premier League (IPL) for five years. According to media reports, the platform is shelling out Rs 625 crore over five years for these rights.

Meanwhile, U Games sold the intellectual property rights of a casual freemium card game called UTP - Ultimate Teen Patti to Nextwave Multimedia, a subsidiary of diversified gaming and sports media firm Nazara Technologies, in a cash deal worth Rs 10 crore in April 2024.

Where did Games24x7 spend money?

Games24x7 spent heavily on advertising and promotions during the financial year, as the company looked to create awareness and attract audiences to its offerings, particularly during IPL.

These tournaments are crucial for real-money platforms as they witness peak usage from players and significantly help improve in user acquisition to grow their respective user bases.

Games24x7's advertisement and promotional expenses jumped by 61.7 percent to Rs 1,421 crore in FY23 from Rs 879 crore in FY22.

These expenses include advertising expenses of Rs 1,197.6 crore, promotional tournaments and bonus expenses of Rs 164.6 crore and marketing and business promotion expenses of Rs 43.8 crore.

The company's employee benefit expenses grew to Rs 445.6 crore in FY23, from Rs 372.8 crore in FY22. Games24x7’s overall expenditure increased by 43.4 percent to Rs 2,147.4 crore in FY23 from Rs 1,497.2 crore in FY22.

What about rivals?

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.

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. The startup posted a profit before tax of Rs 120 crore for FY23, as compared to a loss of Rs 120 crore in FY22.