Nazara Technologies Set to Build Stronger Presence in Real Money Online Gaming

Nazara Technologies CEO Manish Agarwal stated during the business's earnings conference call on November 1 that the company intends to establish a significant presence in the skill-based real-money market in a systematic and pragmatic manner.

To create a shared technological platform, they want to merge their fantasy sports app Halaplay with their skill gaming business OpenPlay Technologies.

The majority of Nazara Technologies' revenue comes from their gamified early learning and e-sports businesses, which account for a combined 80% of the company's revenue in H1FY22. Their increasing focus on the real money gaming area, on the other hand, has piqued people's attention.

During the call, Nazara Technologies founder Nitish Mittersain stated that the platform would ultimately administer a network of skill gaming sites. According to CEO Manish Agarwal, their goal is to establish India's largest vernacular, social, gaming, and entertainment platform, as well as to improve their position in the vast potential given by the skill gaming area.

In August, Nazara Technologies paid around Rs 186.4 crore for Hyderabad-based OpenPlay. Nazara purchased OpenPlay, a Hyderabad-based skill gaming startup, in August. This acquisition, according to Nazara, was valued at Rs 186.4 crore. Manish Agarwal, CEO of Nazara, stated last month that a combination of acquisitions and expansion has aided the company's growth in recent years.

Furthermore, it holds a controlling investment in the real-money social quizzing app Qunami and provides real-money versions of its cricket (WCC Rivals Clash) and carrom gaming (Carrom Clash) products. According to the company, OpenPlay had revenues of Rs 53.5 crore in FY21 and an annualised gross gaming revenue run rate of Rs 80 crore in FY22.

The gaming giant is aiming to build concurrency

Through market concentration, the gaming behemoth hopes to increase concurrency and maturity. Their concept is that they will not lose money in the skill-based real-gaming sector on an EBITDA (earnings before interest, tax, depreciation, and amortisation) basis. Because if you go down that road, you will have to invest a significant amount of money on growing player concurrency and liquidity. They do not want to do this by big marketing expenditures, whether on brand or performance, according to Agarwal on the results call.

He also noted that Tamil Nadu opened up near the conclusion of the quarter, which will play a role in the second half of the year. Karnataka is undoubtedly at a 12-13 percent contribution, which they will lose, but this is a portfolio where you have to look at the net amount rather than the individual components, according to Agarwal.

Agarwal said that there have been more positives than negatives in the skill-based real-money gaming industry. While Karnataka was closed, Tamil Nadu and Kerala were opened, and Tamil Nadu is a larger state in terms of contribution than Karnataka, according to Agarwal.

The gamified early learning segment grew by 35%

The gamified early learning category (Kiddopia) increased by 35% year on year (y-o-y) to Rs 105.9 crore in H1FY22, while the e-sports segment (Nodwin, Sportskeeda) increased by 62% year on year to Rs 103 crore.

As of September 2021, Kiddopia has around 3,24,699 paying customers, a 16 percent growth from 2,80,891 paying subscribers in September 2020. According to the corporation, the monthly average income per user in Q2FY22 was about $6.30-6.50, while the monthly churn was between 4 and 7 percent across the months. North America accounted for 90 percent of the subscription-based app's sales, which caters to youngsters aged 2 to 7.

The firm's freemium games division increased sales by 10% to Rs 9.9 crore in H1FY22, with in-app revenues increasing by 8% year on year. According to Agarwal, this is one of the company's primary priority areas since there is a significant possibility for growth, but only if the correct unit economics are in place.

Nazara's telecom business earned Rs 34.7 crore in H1FY22, a 19% decrease from the Rs 42.8 crore earned in H1FY21. According to Agarwal, the contribution of this category would continue to decline.

Overall, Nazara Technologies' revenues increased by 30% to Rs 260.8 crore in H1FY22 from Rs 200.5 crore in H1FY21. It earned Rs 28 crore during the quarter, compared to a loss of Rs 8.3 crore in H1FY21.

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