It appears that gaming businesses have figured out how to expand and be profitable, and their formula is simple: charge outrageous platform and commission fees. The financial accounts of Dream11, Gameberry, and now Gameskraft show this pattern.
According to Fintrackr’s analysis of Gameskraft’s financial documents submitted to the Registrar of Companies, the five-year-old company, which runs Rummy Culture, Gamezy, and Rummy Time among other products, reached Rs 2,112 crore in sales during FY22.
When compared to Rs 1,411 crore in FY21, this revenue of Rs 2,112 from subscription, platform, or commission fees from the user for joining the contest increased by 49.7%.
20 crore rupees in other financial revenue was also received by the corporation during the previous fiscal year, mostly from interest on fixed deposits.
On the expense side, 52% of the total cost was spent on marketing and advertising. From Rs 191 crore in FY21 to Rs 450 crore in FY22, these expenses skyrocketed by 135.6%.
Legal and professional fees ended up being the second highest cost center during FY22 due to the constant interaction of the GST, income tax, and other regulatory authorities. In FY22, this expense increased 7X to Rs 142 crore.
During FY22, employee perk spending increased by 80% to Rs 108 crore. Notably, this includes Rs 52 crore in ESOP expenditures that were paid for with equity (non-cash).
Payment gateway fees cost Gameskraft Rs 46 crore, which increased its entire spending by 109.4% to Rs 869 crore in FY22.
In the previous year, Gameskraft’s scale increased by around 50% year over year, and its profit increased by 28.2% to Rs 937 crore (after taxes). The ROCE and EBITDA margins were concurrently 52.61% and 44.35%, respectively. In FY22, the firm spent Re 0.41 to generate just one unit of operational revenue.
The online versions of well-known games, like Rummy or Poker, that GamesKraft has created are obviously preferred by players over alternatives. The fantasy league is another option, giving cash prizes for playing prediction games.
As a result, to produce as they do year after year in a business as volatile as gaming is truly astounding, and the leadership team deserves praise for pulling off this achievement. The only problem will be maintaining the tempo, and on a broader basis, one would wager that they have a good chance of success. Their argument for a successful run in a sector predicted to treble to over $10 billion by the year 2030 is strengthened by the inclusion of the AVGC (Animation, Visual Effects, Gaming, and Comics) sector in the 2022 budget.
