In India you don't have casual payer, you have casual player: Games24x7 CEO

'Gaming came into the limelight during the pandemic, and we also saw a bunch of states passing laws to ban this space'', said Bhavin Pandya

Online gaming company Games24x7, which began operations in 2006, is at its heart a technology firm, says CEO and co-founder Bhavin Pandya. In an interview, he tells Ritwik Sharma that their constant focus has been to understand players on its platforms with the help of data science and hyper-personalisation. Edited excerpts:

What are Games24x7’s expansion plans in India and overseas?

In India, people want to play if they can get something in return for it, if there is a real sense of competition. Casual playing is not a big thing yet. That is because of the nascency of the market and our culture. If you look at the West, where casual gaming is doing very well, it has evolved after years of people being exposed to it. One of the biggest realisations is that if you are offering your products in India, they have to be games of skill where people can play for money and win money. Internationally, casual gaming has a very bright future. So we are working on both of these aspects.

Rummy did well for us, and also fantasy games (My11Circle). But apart from these two, and maybe a little bit of poker, there is no real monetisation in India. We are trying to design newer games of skill where people can actually feel engaged. We are doing that through our brand PlayCircle, which was launched this year. On the casual gaming side, we’ve built this studio out of our Bengaluru office but we’ve noticed that in India you don’t have the casual payer, you have the casual player. And not as many of that.

If you want a real casual player, you have to go West, go to the US where the market is a lot more mature, and cater to the middle-aged women audience that is doing really well in terms of monetisation. That is where we are focused.

Does the doubling of investments this year reflect industry growth? And is there then a bigger need to focus on hyper-personalisation?

There’s very little correlation between increase in investment and how well the Indian gaming industry is doing. It was doing well even pre-March 2020. What the pandemic did was bring gaming into the limelight, because a lot of people couldn’t go out and saw it as a legitimate pastime.

What you are also seeing is that a lot of people are leaving very quickly or are not monetising very well. These are players who were exposed to gaming before the pandemic but had other things to do and were fence-sitters. Gaming is not a legitimate form of entertainment for them. In fact, in some cases, we have seen that you are spending a lot more money to acquire these players and not breaking even after 10-12 months. Why is that happening? One is, let’s say, they are lower-quality players. They come, check out your platform and say, “this is not for me” and move away. The other big reason is that when you acquire by the masses, you use one formula. You don’t appeal to a player understanding what he or she is all about.

I can do that only if I am able to identify players before I acquire them. That’s where a lot of our work goes into. It’s like a big complex puzzle, and that’s what data science helps to solve. That’s what hyper-personalisation is all about.

Since data plays a pivotal role, what kind of tools do you use to present the right options to players?

First and foremost, to try and understand my players I have to constantly track data in real time, once a user gives permission. We’ve built some of the tracking software on our own, some are third-party. Tracking players gives you a lot of raw data that you have to figure out how to structure. This is where at least at our end we use some of the services that AWS (Amazon Web Services) provides. Our business intelligence team also has built solutions where they are constantly trying to organise data based on the kind of use it will have.

Once you’ve structured the data, first you have to ask the hypothetical question, “What am I trying to look at in the data?” That comes from the product and business teams to form behavioural views on players. Then you build models, and figure out the different types of players. We try to build different cohorts or groups of players that are similar in their activity but we will not bind them to a certain characteristic because then you are restricting yourself.

If I know that a particular player is playing from a particular latitude and longitude, I know what place on earth that is. If I know the socioeconomic condition of that place I am better able to understand the person’s spending capacity, likes and how do I appeal to the player more. Those are things that I will learn when I have some of the third-party data, which we integrate with the data we already have to build the right hypothesis and validate them. Finally, we will experiment.

I need tools all along, from tracking data, to structuring data, to building models, to experiment effectively, and then to help me understand player behaviour.

How important is in-app purchases in the revenue mix? Also, what is your registered user base and your target for conversion?

In skill gaming, the platform doesn’t care whether you are winning or losing. As long as you play with someone it will take a percentage sum for providing the service — matching you with the players, processing payment and withdrawal, and so on. With in-app purchases, you can buy certain shortcuts to proceed when you’re playing a particular game and are at a stage where you’re not able to get past. They are very different from skill games because they only happen when you are not going to get anything in return. In India, people don’t want to spend on such things. This is the key difference between India and some places in the West. People in India want real competition where they are putting ~5 and getting ~6-7 back.

We have upwards of 50 million players registered on all our platforms combined. We have many cash players as well, but our lead conversion ratio is generally, and I would say even for the industry, is in the range of 5-15 per cent of the registered players.

Our targets are always based on increasing user engagement. Just bringing in tens of thousands of players on my platform doesn’t mean anything. People will begin to realise this now as you won’t be able to see so many acquisitions. Our targets have always been based on getting the right kind of players and maximising their LTV (lifetime value).

What are the innovations you’ve focused on in terms of the experience as well as the kind of games in India?

For the longest time, the industry globally thought that the harder you make it for the player to withdraw money, the more the money will stay in the system and generate revenue. We felt it didn’t make sense, because one of the biggest problems we face in India is trust deficit.

We said let’s have two groups for our high-value players and process withdrawal for one as instantly as possible. This wasn’t easy because you have to first make sure the withdrawal the players are requesting is of money that they have won legitimately without abusing our bonuses. We devised a system to be able to identify fraud quickly and also make sure legitimate withdrawals were processed instantly. We saw that the players whose withdrawals were being processed instantly had LTV that was 10-15 per cent higher than those whose withdrawals were processed in six-seven days. That’s a classic example of an innovation that did really well for us.

We’ve been racking our brains for a long time. But the games that are most likely to work are the ones in which there is a lot of skill, obviously, and there also has to be an element where people believe they can do well. Those are exactly the kind of games we are working on. What and how we are innovating will become clear in a month or two because we are going to release a few such games. So it can’t be 100 per cent skill but still has to be predominantly a game of skill for it to be both engaging and legally permissible.

How do the regulatory uncertainties in India affect your business, vis-a-vis overseas markets?

Gaming came into the limelight during the pandemic, and we also saw a bunch of states passing laws to ban this space. But this year the high courts of Tamil Nadu and Kerala gave landmark judgments saying that the bans were unconstitutional. They were not debating whether these were games of skill or not. Can I ban games of skill in my state or not? That is what has become a question. You cannot ban something that is my constitutional right.

So in terms of regulation, the pandemic has been very good because while the bans happened, a lot of clarity also emerged. That is where I’d say there has been immense progress in terms of understanding what games of skill are, what can be offered, and how they can be offered. The way this is different from what’s happening internationally is that in the West everything is regulated. We would also like to move in that direction because once gaming per se is regulated, you can decide what kind of gaming is acceptable and what is not.