The Pay-to-Play ecosystem of online gaming predominantly consists of Rummy, Fantasy sports, and online poker, and a small segment of casual pay-to-play games. This segment is popularly called the real money gaming segment which is about 70- 75% of online gaming in India. Rummy consists of 99% of the total revenue split. We have a current user base of about 55 million players, Siddharth Sharma, SVP- business strategy, Head Digital Works told BrandWagon Online.
According to the recent FICCI-EY report, the online gaming segment grew 34% in 2022 and is expected to reach Rs 135 billion by 2025. Real-money gaming accounted for 77% of segment revenues. With more than 500 million online gamers of which 90-100 million play frequently, the online gaming segment is on the rise. Also, online gaming generates Rs 11 billion in digital advertising revenues and is expected to reach up to Rs 20 billion by 2025.
The company claims to charge a platform fee for each game which is played. It further claims to charge 20% fee for fantasy sports, 10% fee for rummy, and five percent for poker.
According to the firm, irrespective of the format, a bunch of players play against each other, to create a pool of money.“Say there are five players who put in Rs 100 each to play either a game of rummy or poker, or fantasy sports, the operator takes anything between five percent to 20%, depending on the format of the game. So, the operator’s revenue is five percent- 20% of the pot on which the operators pay GST. So, the winner takes the delta money, that is, Rs 450 out of the five players minus Rs 50 rupees that the operator charges”, he added.
Revenue from operations declined 13.5% to Rs 721.8 crore in FY22 from Rs. 819.2 crore in FY21. Profit shrank 17.9% to Rs 17.8 crore in FY22 from Rs. 21 crore in FY21, during the same year in the corresponding year, according to regulatory filings accessed by business intelligence platform, Tofler. However, Sharma claimed that the company has “seen an immense growth in the previous financial year, we are almost close to Rs 1,100 crore gross revenue. We aim to target over 50% growth to maintain profitability in our business.”
The company further claimed that on average two to six people play a particular game – this is also called the size of the table, otherwise. The maximum bid is about Rs five to 15,000 per table on the platform. “The male to female player ratio is 9:1 for A23 rummy”, Sharma said.
“We have seen games played upwards of Rs 10 crore a day and between Rs 20-30 crore is wagged.” he explained. It further claims that the average cost of customer acquisition is Rs 4000 per customer.
The company claims to have spent about Rs 550 crore in marketing in FY22. “We plan to spend more than Rs 600 crore in FY23,” Sharma stated. Of this, digital accounts for 75% of the ad spends. Of its total spends on digital, less than five percent is spent on influencer marketing.
Follow us on Twitter, Instagram, LinkedIn, Facebook