Deltatech Gaming that owns gaming platforms Adda52 and AddaGames is all set to go public and meanwhile the gaming company is also focusing on taking poker to every corner of India through digital and offline channels of marketing. Shivanandan Pare, Executive Director and CEO of Deltatech Gaming talks exclusively to Storyboard18 about the expectations from IPO and how capital that gets infused in the company will help them grow the company and category. Pare shares a detailed breakdown of the marketing channels that work best for poker and explains why they do not foresee any drop in spends in the coming year.
Edited excerpts
There is so much being said around the need for regulations in the gaming space. What are your observations on the same? How important is it for the industry to be regulated?
Not having a regulation in place definitely has an impact on us as an industry because it makes everything uncertain. It impacts everything from investments to attracting and retaining talent. At the end of the day the customer is also impacted because of the uncertainty. We have been advocating that there should be a regulatory framework in place.
The government looks at this industry as a great economic activity in terms of employment generation and in terms of revenue generation for the government, by way of tax. So we are hopeful that any step taken by them would be towards boosting this industry. Having said that, they have their own parameters, their own speed and I think it will work out positively for all of us.
GST has remained a matter of interest for stakeholders. Can you demystify the confusion around it?
There are two elements to it. One is valuation on which GST should be charged and the second is what should be the GST percentage. We are a technology platform that enables consumers/players to come and play against/amongst each other. We don't take anything from the money that the consumer puts into the game. We charge a platform fee. This is popularly known as the rake. GST should be charged on this and while a lot of media reports say otherwise we are extremely confident that the GST for all players should be charged on the rake earned by the platform. Otherwise, it becomes extremely unfair because as platforms we are not taking any part of the money brought in by the players or the pool, which gets created.
It is like asking a stock broker who has started a trading platform to pay GST on the volume of trading being done on the platform.
From all the interactions we’ve had with the government officials and decision making bodies it is clear that they understand the way we operate. If it pans out any other way nobody will survive.
Poker is something that the Indian consumer has just started opening up to. What are the popular marketing strategies used to not just amplify reach and engagement but also popularize poker?
Poker is not the native card game for Indians. It is something the millennials and Gen Z have started playing in India. It's a game that provides instant gratification.
Whatever we do to promote ourselves also needs an offline link because when we reach out to our potential players in the offline media we are able to demonstrate to them how the gameplay happens. For example, during Durga Puja this year we tied up with close to ten puja committees and a popular regional media company and we put up stalls where we directly reached out to our consumers and helped them understand the gameplay.
While marketing for us will continue to be digital focused. Wherever there is inventory to invest in we will definitely take it up since that is where our target audience is but the channels are restricted for poker so the amplification will continue to happen through offline links.
Apart from digital and offline links the third leg of marketing for us is to build trust through tying up with celebrities.
We started with Dinesh Karthik. We also collaborated with Bollywood singer and music composer Salim Merchant and we have our calendar full for the next three quarters with similar kinds of celebrity collaborations. They are not just from sports and entertainment but all walks of life.
We have also not shied away from mass media. We ran a campaign called #KhelJaao which was basically our way to demystify and democratize poker.
Are you looking at rationalising spends in 2023?
The way we or our parent group operate, we are an extremely positive cash flow focused group. Our marketing spend is a percent of our top line. Generally, consumer internet businesses burn a lot of money in marketing and acquiring customers. We don’t do that at all. There are two elements of marketing or promo spends that any gaming company does. One is in terms of incentivizing activation or reactivation of the users. When I say activation it is generally acquisition and reactivation could be for people who would have slowed down their activity on the platform and then there is retention.
So pure acquisition and marketing spends for us till September has been around Rs 20 crore which is a percentage of our revenue and we would be maintaining similar ratios going forward. Of course, unless the revenues get hit. As long as revenues are intact for us we will continue to spend.
Influencer marketing is an integral part of any marketer’s playbook. Does the same apply to you as well?
We believe the concept and ability to influence millennials through one particular large brand ambassador is fading out. At least that has been the case in the last two to three years. If a brand wants to reach out to a particular cohort of consumers, the best route is to reach out to an influencer in the segment. Throughout the history of marketing and advertising, celebrities have been used to connect with a particular consumer base. Today the internet as a medium has sliced and diced it through influencers. Mostly investing in an influencer is way more economical than investing in a huge celebrity. For a pure digital brand like ours it makes great sense for us to associate with influencers at all times.
Can you help us understand the men-women ratio in terms of players on your platform?
The gender ratio currently is 80:20 where 80 is male but we see the ratio changing as more and more skilled women poker players are taking to the game and the platform. This will soon become 70:30 and I see the gap decreasing further in a short time.
When is your IPO expected? What are your expectations from the same?
We have completed with the DRHP, we have got SEBI approval, we have completed the road shows and the bankers will have to get back to us on the timing. As for expectations, an IPO enhances the visibility of the company and puts a lot of responsibility on the management which we believe will help us in a lot of ways. The other thing which comes with an IPO is the additional currency in the form of equity, which can be used to attract and retain talent in the primary phase and use it as a measure of how much value the team is creating. The capital that gets infused into the company will help us to grow faster and popularize poker across the country.
