The real-money gaming (RMG) sector is going through a torrid time especially post the goods and service tax (GST) revision to 28% GST on full value. According to a report by EY, the industry is expected to grow at a 15% compound annual growth rate (CAGR) to reach a market value of Rs 33,243 crore by FY28. The report further suggests that RMG revenue constitutes approximately 82.8% of the online gaming segment size, presently. However, it is expected to decline to 75.4% by FY28 owing to the recent GST amendments and GST notices. It is fair to say that the sword of Damocles continues to hang over the heads of online gaming companies. Founders resorted to different methods of keeping their companies profitable with a few laying off staffers while a few dialled down their marketing activities while continuing to grow their businesses. Baazi Games, a real-money online gaming company, has witnessed growth in the last few years.
The company recorded an increase of approximately 51.56% to Rs 19.33 crore in FY22 from Rs 9.36 crore in FY21. The company recorded a net profit of Rs 1.73 crore in FY22, as per regulatory filings accessed by business intelligence platform, Tofler. In a conversation with BrandWagon Online, Varun Ganjoo, chief marketing officer and co-founder, Baazi Games, talked about the company’s marketing strategies, its focus on Poker and its growth, among other things. (Edited Excerpts)
What are the marketing strategies Baazi Games is working on for FY25?
The next few years are big for the entire real-money gaming space, specifically for poker. While other RMG games have been in the system for some time now, poker is relatively new. The base is set and I think now is the time to expand. We are going to focus on driving more awareness for poker, adding more consideration and driving acquisitions for our platform. The strategy going into the market is going to continue the same way where we are going to focus on different aspects of the sport and while being an RMG (real-money gaming) platform, the focus is not on money, that is a byproduct of the game. The element of the sport that we intend to promote is the true nature of the sport.
What we have also witnessed over the last few years is that the sport is not restricted to metro cities. It could have started from there 10 years ago but now it’s a healthy mix coming from tier-1 and 2 cities. Recently, we saw people from cities such as Agra, Pune, and Chamba in states like Himachal Pradesh, Uttar Pradesh, and South or Northeast, people from every state of the country are winning. The game is expanding across all corners and it’s on us to take it further to these spaces and not restrict it to the metro cities. We as a platform have been focused on also building other key pillars, which are the analytics platform and the learning platforms, which make sure that we have dedicated learning tools within the app. People who are new to the platform are not well-versed with the game. Hence, we don’t push them into the real money ecosystem. We let them go through a journey where they can go through those learning courses for free and then practice the game for free of cost so that before they jump into the actual game, they know the know-how of the game.
We recently launched a full-fledged analysis tool called ‘Poker Shots’ which is in its Beta phase. We’ll be putting in more work on that in the next few months and eventually, it will be the most comprehensive analysis tool for poker in the world. The focus on that is because just like any other sport, even poker players need a lot of analysis of their game to improve and get better at the game. Our marketing strategy involves everything, from providing and promoting platforms like the National Poker Series to making sure that the right set of communication and the right set of journeys is being provided to the users
What is the customer acquisition strategy for Baazi Games and PokerBaazi?
Our primary source of acquisition remains digital. Most of our acquisition happens through digital channels, social media, being one of them. We are not just focusing on direct user acquisitions. We are also driving awareness for the sport in general. We have chosen places specifically where we feel that we will find the right audiences. We’ve also partnered consistently with platforms like Shark Tank India so that the right set of messages goes to the right set of audiences at the right places. And alongside that, we do a bunch of performance marketing activities like social media marketing, and influencer marketing. Those channels remain always active for us. Apart from that, we’ve also started true content marketing, which means driving a lot of poker content. We have recently collaborated with a poker OTT (over-the-top) platform called PokerGO and we have exclusive rights for promoting their content in localised languages. We share the content on YouTube as well as on the PokerBaazi app as well.
The idea is to show the best of the world and the legends of the sport globally, and their game in localised languages so that people in India can see and adapt to the game. We’re also providing opportunities to play to the people in India to have such platforms. We recently did a learning coaching boot camp for the National Poker Series, this was held in Goa and approximately 24 players were taken over through some participating criteria. They were provided with mind activities, mind coaching, and poker learning, over four to five days. The content was captured and taken to the masses who missed the boot camp in person. Apart from driving awareness and going to mainstream media, content marketing will be a key pillar.
Poker has been a controversial subject, especially in India with the Madras High Court recently overturning a ban on Poker. How do you think the National Poer Series will change the dynamic of Poker in India?
Poker, globally in a lot of places is already recognised as a skill sport. In fact, in places like the US, one can also write it as an actual profession in their bios. It is being taught in person at universities like MIT and Harvard but even in India, educational institutions like IIM are also giving sessions and poker courses. This means they directly acknowledge poker as a sport. The courts overturning decisions is because these institutes have already recognised that games like poker and rummy are a game of skill and whether played with money or without money does not alter that criteria. We feel we are going to see more such decisions coming in the future and more acceptance of poker being held at a larger level, it being called a sport.
When we organise events like the National Poker Series and people from remote regions come in and win multiple medals, it cannot be a fluke that someone is winning four or five medals in a series over 15-20 days where 1000s of people are participating. There has to be some level of skill and we are making sure that we take that information to those places so that people realise that people from different places are doing big in the sport. It’s going to be gradual, but we see the acceptance of poker is growing as a sport.
How has the GST revision to 28% impacted the advertising and marketing for Baazi Games?
The new tax implementation, which came in from October last year, has had a big impact, more so because none of the companies passed it on to the consumers. It was a big change in taxation, almost a 400 to 500% increase in GST. The company’s absorbing this tax is some hit and it impacts all your areas, including marketing. Specifically for marketing, we had to take a backseat for some time. There is scope and there is a market which is there to capture and grow the sport. We are back at it and on an industry level, there is a lesser number of companies advertising at scale, even on platforms like the IPL. However, the bigger players in the industry are back at it in the hope that whenever the government reviews the GST situation, we will be hoping for some positive decisions in those reviews.
What is the future roadmap of the company?
We have been growing at about 70-80% year-on-year and in terms of our user base, we added close to a million users in the last financial year. We see the entire RMG has been growing at about 30% compound annual growth rate over the last couple of years. We have different visions for our different verticals. For SportsBaazi, we intend to make the live match ecosystem grow bigger and to make people play the formats that are around live sports. There are new trends and new formats, and games are being introduced over there. As for PokerBaazi, the vision is to grow poker as a skill sport. We intend to grow it and make it a household name similar to a sport like cricket and football. We feel that poker will be India’s next big thing in the RMG sector.