In FY22, the Games24x7 scale declines by 24% and experiences losses
- ByStartupStory | November 5, 2022
Games24x7, a multi-gaming platform, joined the illustrious unicorn club in March 2022 after raising $75 million with the help of Malabar. The Mumbai-based business has overtaken Dream 11 to become the second most valuable startup in its industry and the third unicorn.
According to the financial filings submitted to the Registrar of Companies, the popularity of fantasy and card games appears to have decreased after the Covid, as the income for the Tiger Global-backed company decreased 24.4% to Rs 1,169.27 crore in FY22 from Rs 1,546.27 crore in FY21 (RoC).
RummyCircle and the fantasy sports website My11Circle are the major platforms for Games24x7’s business. Games24x7’s main source of income is the service fees deducted for entering tournaments or competitions, which contributed 98.7% of operating income in FY22 but decreased by 24.3% to Rs 1,154 crore. The sale of virtual goods in freemium games generates the remaining operational income, which declined 32% to Rs 12.14 crore in FY22.
Additionally, the business receives other income, primarily in the form of interest on fixed deposits, which decreased by 23.4% to Rs 12.46 crore during the fiscal year that ended in March 2022. The company’s major cost centre, representing 58.6% of total expenses, is advertising and promotion, which is a result of the extensive marketing effort and the involvement of numerous brand ambassadors. But in FY22, this expense dropped by 10.3% to Rs 877 crore.
Employee benefit costs were the other significant item, accounting for 25% of total costs. In FY22, this expense increased by 83.9% to Rs 372.7 crore. This includes ESOP expenses totalling Rs. 108.25 crores, of which Rs. 67.5 crore was paid in cash in FY22.
The company increased its total cost by 6% to Rs 1,497 crore in FY22 from Rs 1,411 crore in FY21 by adding an additional Rs 38.4 crore for legal professional charges and Rs 14.7 crore for subscription membership fees, respectively. As the scale is smaller, Games24x7 posted losses of Rs 282 crore in FY22 after posting profits of Rs 110 crore in FY21. The business invested Rs 1.28 in order to generate just one unit of operating revenue.
As of March of this year, Games24/7, which is currently valued at $2.5 billion, had a total of 100 million users on its platform. It’s interesting to note that the company has established Games24x7 Ventures, a $50 million investment fund for early-stage interactive entertainment firms. In August of last year, the parent company of the business’s arch-rival Dream11 also unveiled a $250 million venture fund to support entrepreneurs in the sports, gaming, and fitness industries.
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