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Business News/ Companies / News/  WinZO Games posts 120-crore operating profit in FY23 after similar loss in FY22
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WinZO Games posts ₹120-crore operating profit in FY23 after similar loss in FY22

The social-gaming startup’s revenue surged 182% in FY23, capping an impressive turnaround amid tough times for India's gaming industry.

Last year WinZO Games announced the launch of its platform in Brazil with an investment of $25 million, as challenges mounted for India’s gaming ecosystem with the implementation of a 28% tax. Photo: HTPremium
Last year WinZO Games announced the launch of its platform in Brazil with an investment of $25 million, as challenges mounted for India’s gaming ecosystem with the implementation of a 28% tax. Photo: HT

Mumbai: WinZO Games, a homegrown, vernacular, social-gaming startup with more than 175 million users, has posted an operating profit of 120 crore in FY23, after positing a 120 crore loss in FY22, according to financials submitted to the Ministry of Corporate Affairs.

Founded in 2018 by second-time entrepreneurs Paavan Nanda and Saumya Singh Rathore, WinZO Games saw its revenue surge 182% from 242 crore in FY22 to 687 crore in FY23.

The turnaround could be attributed to WinZO's multi-gaming platform approach and micro-transaction model, which have led to superior cohort retention and distribution metrics. The company has amassed an organic user base of 175 million – representing about 30% of India's online gamers – in just five years.

The founders had previously told Mint that by partnering with more than 100 game developers, the platform had established a sustainable monetisation model that outperformed traditional methods. WinZO follows a community-led distribution strategy, which ensures equitable marketing spends among micro-entrepreneurs across India, fostering inclusive growth and accessibility.

The company, which has just 150 employees, has so far raised $100 million from investors including Kalaari Capital, Griffin Gaming Partners, Maker’s Fund, Courtside Ventures and Pags Group.

Last year WinZO Games announced the launch of its platform in Brazil with an investment of $25 million, as challenges mounted for India’s gaming ecosystem with the implementation of a 28% tax.

No tweaks to new tax regime before SC decision

On 27 March Mint reported, citing a source, that the federal indirect tax body is unlikely to make any changes to the 28% GST regime on online money gaming until the Supreme Court gives its final order on a bunch of tax disputes for the period prior to its introduction last October.

As per the decisions of the 51st GST Council meeting last August, ministers were to review the implementation of the tax regime for the online gaming industry after six months of its implementation. This period ended in March but, given that a model code of conduct is now in place in view of the Lok Sabha elections, this review can only happen after the polls. However, a review does not necessarily mean tweaks to the tax regime.

“No further change can be made to the tax regime for online money gaming as the matter is sub-judice. One has to wait for the Supreme Court’s views on the matter," said the person who is informed about the current thinking among central and state policy makers. The review was sought by smaller states like Goa and Sikkim.

Online gaming firms opposed the 28% GST on the full value of amounts deposited by players for betting, saying it would burden the sector, discourage investments and impact the startup ecosystem. They were earlier paying 18% on platform fees ranging from 5% to 20% of the full face value of bets.

The new regime makes a clear distinction between casual online games and those involving a wager. Only actionable claims offered by ‘online money games’ are subject to the 28% tax on full value of deposits made to the platform. Online money games are those in which the player deposits an amount in the expectation of winning some amount in a game or event.

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Published: 03 Apr 2024, 01:23 PM IST
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