Games24x7 thrives amid new GST, explores innovative business models: CEO

'Despite GST, 2023 was best year for our fantasy sports, rummy platforms,' says Games24x7 CEO

Despite the gaming industry's ongoing battle with the new 28 per cent Goods and Services Tax (GST), gaming unicorn Games24x7 witnessed robust growth in its rummy and fantasy sports businesses in 2023. Nevertheless, the company is experimenting with new business models to improve its margins.

“The new 28 per cent GST on deposits increases our tax burden substantially. From a net revenue perspective, and also profitability, the industry is going to be set back by a couple of years,” Trivikraman Thampy, co-founder and chief executive officer, Games24x7 said to Business Standard.

Regardless, Thampy added that 2023 was a great year for the company as the new tax has not taken a toll on the company’s overall revenue.

“In the industry, no one is passing on the GST costs to the consumer; we are absorbing it. Hence, there has been no impact on our topline growth numbers,” Thampy added.

Games24x7 is one of three gaming unicorns (companies valued at over $1 billion) in India, aside from Dream11 and Mobile Premier League (MPL).

“On our fantasy sports platform, we have had the best year by far (in 2023). And the same with rummy,” Thampy said.

Tournaments like the Indian Premier League (IPL) and the Cricket World Cup 2023 gave a fillip to the company’s fantasy sports business, My11Circle, which, Thampy says, has grown 100 per cent every year since inception. The firm expects a similar growth trajectory this year as well.

“We are experimenting at a very rapid pace in terms of new business models to operate in a sustainable manner in the new GST environment,” said Thampy.

In addition to rummy and fantasy, Thampy claimed that the company is thinking “very creatively” about new content and gaming formats for consumers, in line with regulatory norms.

“Our approach is very different from other operators who have dozens of games. Over the next five years, we will launch two or three games. We do not want to become a 100-game portal,” he said.

Despite regulatory hurdles, Thampy expects the company’s next phase of growth to come from rummy and fantasy sports.

“Poker can also be a very exciting market in India. However, it is somewhat limited right now because it is not available on Google Play. Once we get more clarity on what games are permissible, Poker can be a very exciting market. A lot of growth opportunities depend on regulatory clarity,” he added.

Going forward, Games24x7 will continue its investments in data science and artificial intelligence (AI).

“Our growth over the last many years has been powered by very foundational stuff. We invest a lot in data science and AI. Our operating ethos is what we call the science of gaming. We are a very scientifically run business,” Thampy said.

The company, unlike some of its competitors, is also not looking to expand into international markets at the moment.

“I don’t agree that the Indian market is not viable. There are interesting opportunities outside of India in other developing markets, but we have no plans right now. We still find the India opportunity very exciting,” Thampy said.