Indian gaming companies, who have been turning their attention to global markets in the last year or so, are now seeing a major share of their revenue come from these profitable markets.
Plug-and-play gaming solutions firm Gamezop, for instance, has seen its revenue from outside India double in the last one year. It now accounts for 50% of the company’s total revenue. In the last financial year, Gamezop generated Rs. 25 crore in revenue at 25% profit margins, and is expecting this revenue to double in this financial year.
Similarly, online gaming company Mobile Premier League (MPL), is expecting the US to become its second-biggest market in terms of revenue by the end of the year if it continues its current pace. The company has established a presence as a competitive skill gaming platform in the US over the past three months, said Naman Jhawar, senior vice president, strategy and operations at MPL.
“After India, the most important market for us is the US. We've seen a lot of companies in the US adopt our gaming solution. Brazil is the second-largest followed by Indonesia. We saw most of the uptake happen in the last 6 to 8 months only, said Gaurav Agarwal, co-founder Gamezop.
Popular mobile gaming platform Hitwicket too has seen its revenue soar in global markets. Keerti Singh, co-founder and vice president of growth at Hitwicket, said 38% of the company’s revenues from in-app purchases (IAPs) have come from global markets in the last year. Singh said 50% of their overall revenues could come from those markets in the next two years.
Industry experts reason that while the Indian market is great for acquiring new users, the revenue per user an app can draw is much higher in global markets.
“There is no surprise in this. Their revenue models are essentially around views, impressions, and clicks. When this happens in the US market, they get a better rate per impression compared to India or other Asian markets,” said Faisal Kawoosa, founder and chief analyst at techARC.
Singh explains, global markets don’t differ from India in terms of how much people spend on apps. Instead, the difference is in conversion rate, which is the metric for how easy it is to convert free users to paid ones. Indian users are tougher to convert, while global users are more likely to pay. She also noted that conversion rates have grown for India since 2018, but global markets remain ahead.
Unlike MPL and Hitwicket, Gamezop faced a different challenge. Their business model is B2B and so they had to reach out to app and website developers and convince them of the merits of having a gaming section within their products.
“It started with MSN, which now has a gaming section with our games. We used that as a case study to knock on the door of other products and say look, a branded product is using our games and so should you,” Agarwal added.
To convince global brands, Gamezop also made the most of their investor network. “Last year we raised our Series A round by BitKraft Ventures, which happens to be the world's largest gaming fund. And they opened several doors for us. One of our investors Shanakar Narayanan, who was earlier the managing director of Carlyle Asia, also opened a lot of doors for us even in far-off markets like Tajikistan,” added Agarwal.
Another factor that contributed to the growth of some of these companies is that they never too focused on Indian gamers and ensured they had games that would appeal to a larger global audience. Agarwal said, we've always thought about keeping popular gaming genres and global favorites such as pool games, chess, sudoku and fruit chops in our catalog.