Games24x7 aims to maintain user engagement despite the high GST on online gaming

Despite the 28% goods and services tax (GST) levied on online gaming, Games24x7, a gaming unicorn, is investing substantially in product innovations and pursuing cross-monetization opportunities to increase user engagement and retention. The company intends to keep consumers interested with new offers such as fantasy sports, rummy, and poker games.

"We want to be certain that what we are offering is fresh. So, product enhancements are definitely something we're focusing on," co-founder and co-CEO Bhavin Pandya stated. The company is looking into cross-monetization potential to increase user lifetime value (LTV).

"The idea is to cross-monetise as many users as we can… If we have other games like rummy and poker on our platform, we can keep players engaged while the cricket match is also going on. This has served us really well and allowed us to maximize user LTV (lifetime value),” Pandya said.

My11Circle, Games24x7's fantasy sports platform, has achieved "phenomenal" returns, with revenues and team creations up 60% during IPL2024. The company is focused on expanding its fantasy sports platform and has dedicated roughly half of its marketing budget to IPL-related initiatives.

Games24x7 is one of the country's three gaming unicorns (businesses valued at more than $1 billion), together with Dream11 and Mobile Premier League (MPL). The company currently has more than 120 million players. Pandya believes that gaining profitability is just a result of continued growth and improvement. "We aim to become profitable as quickly as possible, and we hope to do so in the near future."

Games24X7, which also offers RMG services, has suffered as a result of the additional tax. According to Pandya, the action has pushed the Indian gaming business back 12-18 months, and clarification on retrospective tax and clear rules are urgently needed in the gaming sector.

"The best outcome would be that the government issues a notification that they would not go after companies for retrospective tax," according to Pandya.

Meanwhile, Games24x7 is exploring fresh funding opportunities.

"We are continually seeking for synergies and collaborations in new age sectors that we can use or from which others might gain. Nothing has really taken shape yet, although discussions are ongoing," Pandya explained.

Despite the GST burden, Pandya claims that the firm is well-capitalized and does not require cash.

"One of the most effective times to generate donations is when you don't need them. So we're always engaging, and the discourse is open. There is no established agenda as of yet. But if there is interest, we are glad to consider it," he said.

Going forward, the company's major route of expansion will seek to recruit additional players for its existing games while also developing new games when permitted. The gaming company does not want to expand into overseas markets.