Gaming startup Nazara reports sharp jump in FY19 profits despite muted growth

Online gaming company Nazara Technologies reported a three-fold growth in net profits for the financial year 2018-19 due to lower base effect despite a decline in revenues.

The Mumbai-based company’s net profits grew to Rs 4.4 crore in FY19 from Rs 1.2 crore in the previous year. In FY18, the company incurred Rs 35.7 crore in one-time exceptional expenses on account of investments in overseas subsidiaries and employee dues.

However, in FY19, its revenues from operations declined 2% to Rs 167.2 crore from Rs 170.5 crore in the previous year, mainly on account of a 63% decline in revenues from  subscription-based games to Rs 95.5 crore from Rs 151.7 crore in the previous year.

The company’s topline, however, received some support from freemium business that grew 58% to Rs 24 crore and its e-sports vertical that rocketed 14 times to Rs 46 crore. Other income, which grew 66% to Rs 16 crore, also aided the topline.

Founded in 1999, the company is engaged in interactive gaming and new-age sports media with operations in 64 countries. 

As per Nazara Technologies estimates, the online gaming industry’s revenues grew by 59% to  Rs 4,900 crore in 2018 and is expected to reach Rs 12,000 crore by 2021.

“Overall, Nazara is very excited with the opportunity which (has) massive growth in gaming in emerging markets and Nazara has laid (a) strong foundation to continue to gain market share in a fast-growing gaming market,” the company said in a regulatory filing.

Nazara Technologies owns online games such as the World Cricket Championship, Chota Bheem and Speed Racing. In 2018, it acquired a 55% stake in Gurugram-based Nodwin Gaming, the creator of esports events and owner of popular online game PUBG.

In 2019, the firm invested $5.21 million in sports digital content platform Sportskeeda and also increased investment in fantasy gaming company Halaplay Technologies. It acquired a majority stake in preschool edutainment app Kiddopia for $11.7 million.