Ahmedabad/Bengaluru: The until-recently skyrocketing fantasy sports segment of the online gaming industry in India has in the last few weeks plummeted and now almost completely shattered due to the novel coronavirus crisis. It was kicking and bustling not so long ago and was even expected to see another huge surge in the number of gamers and around Rs 1,000 crore annual revenue during April-May this year.
This slump has happened even as there is an overall rise in the number of online gamers, mainly because people have more leisure time during the ongoing lockdown.
In India, online games with many genres, have three key segments– casual games, e-sports and real money games (RMGs) or skill-based online games played for stakes. All the RMGs, of which fantasy games are a prominent part, some e-sports and other genre are played by paying a fee of sorts. These also offer prize money. All such games are collectively known as transaction-based games (TBGs). These are the biggest revenue source for the industry.
Fantasy games are played online by selecting a virtual team of real players participating in an ongoing sporting event. The gamer, who creates such a team or teams, gains points based on the actual performance of the players during the tournament. The highest point earner wins. In the non-fantasy segment, however, the gamer participates directly in the virtual games.
According to the industry players, there is an over twofold rise in the number of gamers of casual and other non-fantasy games during the lockdown. Because people with more free time, are now playing such games on mobile phones as a favourite pastime, to keep the Covid-19 anxiety at bay. But the fantasy segment, dependent on real sports events, has plummeted to almost zero. Interestingly, It had seen a whopping over 100% growth in its revenue last year.
This tumbling is due to sudden postponement and cancellation of various sporting events, mainly of cricket. It has also given rise to apprehensions about loss of investors' interest. With its exponential growth in the last couple of years, the segment run by a majority of startups, had emerged as investors' favourite, attracting over US $150 million. Most of the around 70 fantasy gaming platforms in India are owned by startups.
In the nearly two-decade old Indian gaming industry, initially games were played on consoles and later on PCs only. But with the surge in the numbers of smartphones and availability of cheaper internet data, it saw a quick growth in the past five years or so. Almost 90% of all the gamers now play on mobile phones. The comparatively newer fantasy segment had seen a phenomenal growth in the last two to three years.
According to a latest report of industry body FICCI and the professional services provider firm Ernst & Young (http://ficci.in/study-page.asp?spid=23200§orid=13), the total revenue of the Indian gaming Industry was around Rs 6,460 crore in 2019. Of this, Rs 4,600 crore came from the TBG segment alone. The remaining was from casual and no-money games which depend on advertisements for income. The total revenue is projected to increase to Rs 18,740 crore by the end of 2022, with share of TBG rising to Rs 15,530 crore.
The industry, overall, has seen a growth of over 40% in its gross revenues in 2019. The TBG grew by 50% while the fantasy games business alone rose exponentially by 118%, according to the report.
The sudden slump and bleak scenario
Yashashvi Takallapalli,CEO of Nostragamus (https://nostragamus.in/), a fantasy gaming platform, estimates the gross annual revenue of the fantasy segment in the country to be over Rs 1,000 crore.
"Now almost the whole fantasy gaming business has come to a grinding halt in the wake of the pandemic. It was growing by over 100% each year before this sudden crisis struck. While the fantasy segment has almost no business now, the non-fantasy and casual gaming segments have seen a daily surge of over twofold in the number of gamers during the lockdown," he said.
"It is because the fantasy games are dependent on real sports. But, in the unprecedented situation, not seen in over 70 years since World War II, almost all the real sports events including the Indian Premier League (IPL) have been deferred or cancelled. In these difficult times, the fantasy platforms are in different ways trying to engage users with things like quiz games, introduction of some non-fantasy games and sale of gaming related merchandise, etc. We are also trying to keep the cost down during this lean patch. The next at least three months are not about making money but somehow being engaged with our users."
Riding on the immense popularity of cricket in India, the fantasy sports had seen a quick growth in the past two to three years. "It was mainly due to high-decibel marketing campaigns with cricket celebrities like MS Dhoni and others promoting them. Out of the various fantasy sports games available in the Indian market, fantasy cricket was the most popular and grew on the back of the IPL and the ICC World Cup held in 2019," the FICCI report mentioned.
Last year, when the IPL-based official fantasy cricket league was launched, the revenue of the fantasy game segment more than doubled. And the number of gamers almost quadrupled, soaring to over 80 million. The gaming industry, overall, had also seen a rise of around 31% in the total number of gamers to reach 365 million.
Now, the current dismal scenario of the fantasy segment can also be understood by another thing. The largest fantasy gaming platform in India 'Dream 11', the only unicorn player in the Indian online gaming sector, too has no big fantasy games to offer currently.
Dream 11 is the official partner of the International Cricket Council (ICC) and International Hockey Federation or FIH and organiser of the highly popular IPL fantasy league. Of the millions of its gamers, most were participants of cricket-based games. Its website (https://www.dream11.com/) has now put a notice that there are no upcoming matches in cricket and hockey currently.
Apprehensions about loss of investors' interest
The fantasy segment is now also worried about losing the investors' interest. Notably, in an open letter to the startup founders in India recently (https://www.notion.so/Best-Practices-for-Founders-in-the-wake-of-COVID-19-54f0c0db17064e6f9e5dd456d9cb26de), 10 global and Indian private equity and venture capitalist firms had cautioned that the changes due to the coronavirus crisis could make things difficult for startups.
Takallapalli, an IIT Madras alumnus, pointed out that both corporate and financial investors were looking quite wary of the current scenario. "See, what has happened with this coronavirus thing is that a lot of people who invest are becoming extra cautious. The corporate investors are now saying that they are not in a position to look beyond their own sectors which have also been hit badly. And the worry with financial investors was about the bleak return prospects. Now because of the current situation they are carefully willing to wait for another at least five to six months or till the situation eases up," he said.
Prior to this crisis the investors were looking highly interested in the booming fantasy gaming sector which had in last few years, seen over US $150 million of funding through them, he added.
CEO of another fantasy gaming platform 'Apne 11' (https://www.apne11.com/), Ratul Sethi, also admitted that these are tough times for them. "Nothing really is happening in fantasy gaming now. Amid this global crisis, it is not just about one particular industry, but majority of things have come to a standstill and once we are out of this challenging phase, things will spring up back again," said Sethi. His startup with legendary cricketer Kapil Dev as its brand adviser was launched last year.
Gains for non-fantasy and casual segments
The number of gamers of non-fantasy games like highly popular action-based ones, arcade and above all casual games has of course seen a surge in the lockdown, Sethi said. "Definitely, such games are prospering during the lockdown. These are not like ours which depend on real sports. That is why platforms, which also offer non-fantasy games, like MPL, are doing better even in these difficult times," he added.
Rolland Landers, CEO of the All India Gaming Federation (AIGF) (https://www.aigf.in/about_aigf/), the apex self-regulatory body of online skill based gaming in the country, said that the number of gamers of the fantasy sports was expected to see at least 20 to 25% growth only due to the IPL this year. Of the 70 odd online fantasy gaming platforms in India, more than half offered cricket-based gaming.
The IPL, which was initially to be held from March 29, has been suspended indefinitely in the prevailing crisis.
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