28% GST an opportunity for gaming companies to compete: Gamezop co-founder

Gaurav Agarwal, co-founder of Gamezop, said those firms that are able to adapt faster will 'emerge victorious'

The introduction of a 28 per cent goods and services tax (GST) on the online gaming industry provides the companies with an opportunity to compete with each other, Gaurav Agarwal, co-founder of gaming platform Gamezop said on Wednesday. Those who are able to adapt to change faster will gain the most, he added.  

Speaking to Business Standard on the sidelines of the India Gaming Conclave 2023, Agarwal said, "The government has shown support to the content and gaming industry in the past. If they have arrived at a decision, we may not have much of a choice but to respect the decision."

 

Finance Minister Nirmala Sitharaman on Tuesday announced that online gaming, casinos, and horse trading will be taxed with a GST of 28 per cent on their full face value. The tax will be imposed irrespective of it being a game of skill or a game of chance.

"Yesterday's decision was a huge decision and many business models will have to change. Decisions like this provide companies with an opportunity to one-up each other. As far as the broader gaming industry is concerned, I would like to wait and watch," he added.

According to Agarwal, the right thing to do right now is "adapt". "Those who adapt faster will emerge victorious".

Several other executives in the industry, while speaking during various sessions at the event, continued to appear positive about gaming in India.  

"It's a unique market, which needs solutions of its own. I am sure smarter players will be able to make a distinct mark and show to the world, what makes a right play for this market. It's a most exciting place to be present, in current times," said Nitin Goel, country manager (India) at Gameloft.

"From immersive experiences to ground-breaking innovations, the gaming landscape is set to redefine entertainment, providing endless excitement and unlocking new realms of imagination," Ninad Chhaya, senior vice-president, Reliance Games, added.

Separately, Akshay Khandelwal, founder of Bowled.io said, "The decision to further regulate the industry puts margin pressures on the incumbents and makes the traditional player economics difficult to sustain, forcing them to reconsider their business models and innovate."

He added, "At the same time, it balances the playfield and presents an opportunity for the next generation of companies like ourselves to introduce newer business models. While, in short-term, it does impact everyone in the industry, including ourselves, we almost see it as the beginning of a new era for the Indian gaming industry."

While Agarwal acknowledged there is a slowdown in funding in the industry, he added that the gaming and content industry will come out of it faster than its peers.

"Compared to other industries, gaming is still more resilient. The recovery in investments of the gaming and content industries will happen before the recovery begins for other industries," he said.

On monetisation of games, he added that India is a "different" market.

Currently, the highest monetisation comes from real money games followed by in-game ads and purchases.