While the number of online gamers crossed the 500 Mn mark last year in the country, it has not translated into an increase in monetisation of games, Mittersain said
Speaking at Inc42’s The Makers Summit, the CEO said that only the real money gaming segment has been able to scale up in India in terms of monetisation
He said that Nazara might have taken a slightly “over conservative” approach in the real money gaming segment and would double down on the space if given a chance to back in time
The rise in internet penetration due to cheap data and the advancement in digital payments technology over the last few years have given a boost to India’s online gaming industry. However, the Indian gaming market is yet to unlock the true monetisation potential, according to Nazara Technologies CEO and joint MD Nitish Mittersain.
It must be noted that the number of online gamers in India crossed the 500 Mn mark in India last year, as per a report by VC firm Lumikai. However, this has not translated to a corresponding increase in monetisation of games.
“What has not happened as yet is, if you leave aside the real money gaming, India has not caught up on the monetisation of games. That transformation is yet to happen. But again, we are at the cusp of that opportunity,” Mittersain said while speaking at Inc42’s The Maker Summit 2023.
Real money games are the ones that charge an entry fee from users and the players stand a chance to win more money. Casual, hyper casual and mid-core, hard core are some of the other segments in the online gaming space.
Talking about Nazara’s journey, the CEO said that the company adopted a conservative approach to real money gaming initially as regulations and taxation policies for the space were not clear.
Despite the improving clarity in these areas, there are a lot of grey zones, he said. Mittersain also admitted that Nazara might have taken a slightly “over conservative” approach in the real gaming (RMG) segment.
“I think, if I were to do things differently going back, let’s say a decade, I would definitely double down a lot more on the RMG space than what we have done till now,” he said.
Comparing the situation of the gaming space when Nazara started in 2000 to the current era, Mittersain said the biggest problem initially was that Indians didn’t have access to gaming devices such as personal computers, consoles and decent smartphones. Besides, the internet was also very expensive.
In contrast, almost everyone has a smartphone now and even low-cost smartphones provide haptic touch and allow users to play games. Besides, the internet has also become accessible to almost everyone and the country has a large young population which has a keen interest in gaming.
Highlighting the opportunities for gaming founders, Mittersain said that venture capital firms and limited partners are now taking interest in the sector. He also cited the example of ace investor Rakesh Jhunjhunwala’s investment in Nazara to describe the changing situation.
Nazara, which is listed on the stock exchanges, reported a 31% rise in its consolidated net profit to INR 22.4 Cr in the third quarter of financial year 2022-23 (FY23) from INR 17.1 Cr in the year-ago quarter on the back of a strong growth across business segments. Revenue from operations surged nearly 70% to INR 314.8 Cr in Q3 FY23 from INR 185.8 Cr in the December quarter of previous year.