Here's how India's online gaming market fared in FY22

According to the World Economic Forum (WEF), mobile devices are the primary drivers of India's gaming industry.

Affordable internet and the availability of faster smartphones with enhanced gaming capabilities have also fuelled the market.

However, in a bid to arrest increasing cases of addiction, various state governments are imposing a ban on "games of chance" and "online gambling".

With this in mind, the government appointed Ministry of Electronics and Information Technology (MeitY) as the nodal ministry to regulate gaming. Earlier this year - MeitY released draft amendments for online gaming rules to ensure that online games should be offered in conformity with Indian laws and that the users of such games be safeguarded against potential harm.

FY22 turned out to be a tough phase for startups in fantasy, e-sports, and skill-based gaming space as they couldn't hack growth as swiftly as they did in FY21. The pandemic had given wings to their scale in FY21 as people's outdoor movement was limited.

India's biggest fantasy gaming platform Dream11 continued its growth momentum in FY22 as its gross revenue grew over 50 percent and came in at close to Rs 4,000 crore. But, at the same time, the firm's profit shrank over 56 percent in the fiscal ending March 2022.

Fantasy sports was the only source of revenue for the 14-year-old firm. Dream11 generates its revenues primarily by charging platform fees to its users who participate in fantasy sports contests.

Dream11 has been sponsoring the Indian Premier League (IPL) for the past three editions and onboarding a host of star cricketers as brand ambassadors. As a result, advertisement and promotional expenses claim the largest share of the firm's costs. On a unit level, Dream11 spent 0.98 paisa to earn a single unit of operating revenue in FY22.

Meanwhile, MPL or the Mobile Premier League, India's third most-valued gaming startup, reported a 3-time surge in its loss to over Rs 1,120 crore in FY22 versus FY21. The firm saw its revenue from operations increased only 29 percent to Rs 497 crore in FY22.

For context, the company's operating revenue grew over 8x during FY21.

Total expenses jumped 116.2 percent to Rs 1,7,77 crore as advertising and promotional expenses surged 81 percent year-on-year (YoY).

India continued to remain the top market for MPL, contributing more than 88 percent to the startup's total revenue.

MPL offers more than 60 online games such as Fantasy Cricket, Rummy, and Speed Chess with real cash prizes in paid tournaments and 1v1 games.

The startup spent Rs 3.57 to earn a rupee of revenue.

Multi-gaming platform Games24x7 entered the coveted unicorn club in March 2022 after raising $75 million led by Malabar. The Mumbai-based company has become the third unicorn and second most valued startup in this space followed by Dream11.

The vogue for fantasy and card gaming seems to have dropped post COVID as the revenue for this company shrank 24.4 percent to Rs 1,160 crore in FY22 from over Rs 1,540 crore in FY21.

Games24x7's operations mainly run on RummyCircle and the fantasy sports website My11Circle. Total expenses stood at close to Rs 1,500 crore.

As the scale shrinks, Games24x7 losses were recorded at Rs 282 crore in FY22, after a profitable FY21 when it showed Rs 110 crore in profits.

On a unit level, the company spent Rs 1.28 to earn a single unit of operating revenue.