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Business News/ Companies / Nazara eyes 1,000 crore game studio revenue with 830 crore acquisition plan

Nazara eyes ₹1,000 crore game studio revenue with ₹830 crore acquisition plan

The company will look to tap Indian game developers, while events subsidiary Nodwin continues to be a significant revenue generator.

In FY23, Nazara crossed the ₹1,000-crore revenue milestone for the first time to reach ₹1,091 crore—growing 21% year-on-year. (AFP)Premium
In FY23, Nazara crossed the 1,000-crore revenue milestone for the first time to reach 1,091 crore—growing 21% year-on-year. (AFP)

NEW DELHI : Nazara Technologies, India's only publicly-listed gaming company, aims to scale its game development division's annual revenue from approximately 350 crore in FY23 to 1,000 crore by the end of FY25, by leveraging an 850 crore fund allocated for mergers and acquisitions. 

As part of its acquisition strategy, Nazara's game development and publishing arm will target both Indian and global gaming platforms, and increase its contribution to the group's overall revenue, Nitish Mittersain, chief executive, said in an interview.  

“In India, we’ll look at developers with early-stage IP, while for global firms, we’ll look at developers with more scaled-up IP, strong profitability and cash flow. Our idea is to acquire companies with established gaming IP, and then scale it up. We’ve identified many opportunities, and are meeting companies actively to see acquisition opportunities."

While the company's events subsidiary, Nodwin, will continue to be a significant revenue generator, the focus will be to strengthen the gaming vertical, he added. “Nodwin will continue to be a significant contributor to our revenue, but our game studio business will grow most significantly. As of last fiscal, it was around 350 crore in revenue. We plan to scale it up to 1,000 crore."

In FY23, Nazara group companies crossed the 1,000-crore revenue milestone for the first time to reach 1,091 crore, up 21% from a year ago. Esports, which operates under Nodwin, contributed 50% to its annual revenue, while gaming, accounted for 37%. In the next two fiscals, this balance could tip in gaming’s favour, Mittersain said.

As part of its efforts to scale up the gaming division, Nazara is in talks to acquire mixed reality brick and mortar gaming chain Smaaash through the National Companies Law Tribunal (NCLT)’s insolvency and bankruptcy process, Mint had reported on 7 March.

“As of 15 March, we had not finished our submissions for applying to acquire Smaaash due to some incomplete information. We have time to submit it by end-March. We’re still at an exploratory stage with such products," he added.

“There can be some areas that we can adopt in offline-online hybrid experiences. It is also available at a good potential value. All of this works for us to put our hands into this sector, and then see where it goes.This also works with what Nodwin offers, so we can have esports activities in each of these facilities. We can host our own game IPs here, all of which combine to make it a relatively small bet at a decent value."

However, while game development and events will form the core of Nazara’s monetization strategy, online gaming remains muted. Titles like rummy and fantasy sports have been significantly impacted by taxation issues and legal disputes surrounding their classification, and potential links to gambling.

“We were always conservative on online gaming due to uncertainties in regulation and taxation. Once more clarity comes in, we can be more active. We’re not opposed to it," he said.

India's gaming market is estimated to reach $7.5 billion in net revenue by FY28, according to an October 2023 joint report by venture capital firm Lumikai and Google. In-app purchases for gaming, facilitated by developer firms, are expected to contribute 44% to total revenue, up siginificantly from 16% in FY23.

At Nazara, we are targeting this growth opportunity, Mittersain said.

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Shouvik Das
Shouvik Das is a science, space and technology reporter for Mint and TechCircle. In his previous stints, he worked at publications such as CNN-News18 and Outlook Business. He has also reported on consumer technology and the automobile sector.
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Published: 02 Apr 2024, 04:36 PM IST
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