In the past six months, mobile gaming in India has grown manifoldly owing mostly to the two-month long lockdown in the country. The availability of high-speed mobile connection at dirt cheap price, abundant time at hand, and a need for distraction during a trying time have concertedly propelled the growth of the casual games category.
Global downloads of casual games grew 45% in the first half of this year compared with the same period in 2019. According to data by App Annie, the average Indian user increased the number of mobile games they played each month by 35% during the peak month of H1 2020, compared to the average of 2019.
The growth of casual games in the first half of the year was at the cost of fantasy sports that had totally stopped as all the sports events had to be postponed or canceled due to the pandemic. Unlike other forms of mobile games, fantasy sports are based on actual sports events and affect gamers in real-time based on how sportspersons perform on the ground.
According to a recent report by FIFS-KPMG, gross revenues of online fantasy sports operators jumped by 160% totaling INR 2,400 crore (USD 325 million) in FY20 compared to INR 920 crore (USD 125 million) in FY19.
And when the Indian Premier League (IPL), the country’s one of the biggest cricket events, was announced to begin in September, all fantasy sports startups finally had the reason to rejoice. While the market is led by Dream11, India’s only gaming company valued at over a billion US dollars, a handful of new companies have also decided to try their hand at fantasy sports.
Paytm First Games, the gaming arm of a digital payment company, is one among the many such platforms that are trying to acquire new users during this IPL season. Paytm launched its gaming app in April 2019 with the intention of keeping its existing users engaged on the platform. Although, it saw a real uptick in usage post lockdown in March-April.
Paytm First Games started out being baked into its flagship Paytm app and had a lot of casual games such as ludo, chess, and snooker. While casual games did help Paytm First Games get users, the company always knew it would have to get into fantasy sports sooner or later to make a profit. With its maiden entry in the fantasy sport segment, it announced a marketing budget of INR 300 crore (USD 40 million) and onboarded Sachin Tendulkar, an acclaimed Indian cricketer.
In the last 1.5 years, from being a late entrant in this space, Paytm First Games claimed to have emerged as the second biggest fantasy sports platform after Dream11.
We talked to Sudhanshu Gupta, chief operating officer of Paytm First Games to understand the company’s journey.
The following interview is edited for clarity and brevity.
KrASIA (Kr): The current look of the app is quite different compared to when it was clubbed within the Paytm app. How did it evolve?
Sudhanshu Gupta (SG): The company was incorporated two years ago, but we launched the app in April 2019.
When we started out, the app had a lot of casual games as we were experimenting with a lot of categories and genres to learn what could work for a platform like ours. Over the last 1.5 years we have optimized it and narrowed it down to the products and categories that were working really great for us.
In the beginning, the app looked like a game store where you had multiple games in one place. Now we have divided the app into three different zones. One is a lounge center where we have kept all the casual games for users who just want to kill some time, another section is for rummy players who want to earn some money while playing games, and the third biggest category is fantasy sports for more serious gamers.
Looking at the overall user base and size of the contest, we are emerging as the clear number two. Dream11 has been there for over a decade and they have done a fantastic job of creating the category, but there is a lot more growth that is yet to be unlocked. We are happy that our product and marketing investments have worked in our favor.
Kr: What drove the company to make these changes?
SG: When the lockdown happened in late March, that’s when the casual games on our platform really took off. We had games like ludo which were getting five million monthly active users and almost a million daily active users. The casual games came to the forefront at that time. Post that, when we saw IPL season coming in, we knew people would play fantasy sports since cricket is a religion in India. Fantasy sports sometimes outshine even a single casual game in terms of user base. That’s when we decided to re-create the app in different zones so that the users who primarily wanted to play fantasy games would not get disturbed by other contents.
We made these changes roughly three months ago. We recreated the app which is now sort of a bundle that has three different categories fantasy, rummy, and casual games.
Kr: What was the reason to take the gaming platform out of Paytm?
SG: We’ve always had a plan to launch our stand-alone app. But then we were focusing on creating a lot of gaming content and have engagement from users within the Paytm ecosystem. We were working on skill-based games then and it took us a year to build this out.
The reason that propelled us to have a separate app was Google Play Store’s policy that does not allow real money games, which they call gambling, to be inside another app. So, when we decided to start fantasy gaming which involved real money we had to have a separate platform for it.
Kr: Did you lose any user when you launched the separate app?
SG: Not at all. Paytm First Games as it was live on Paytm app, it has its own user base who just migrated to the stand-alone app. In fact, we gained users since we increased our gaming portfolio to include fantasy sports and rummy. So a lot of those users joined our platform.
Kr: What led to the sudden increase in users?
SG: It was a couple of factors. One was obviously because of the lockdown. Although the pandemic was unfortunate, it had a positive impact on the gaming ecosystem. We saw a huge uptick, not just for us but for the whole industry. When the lockdown happened, physical sports had also stopped because of which fantasy gaming got hit, but we anyway had other games on the app. Luckily, since we always had multiple games in one place, we were in a sweet spot that had something to offer for everyone.
That’s when we took advantage of the situation and pushed our platform. While we spent money on marketing, a large chunk of the users came organically to our platform due to the generic demand for mobile games. There were weeks when we had close to 400,000 people downloading our app every day. Pre-COVID-19 we had about 40-50 million registered users, post COVID-19, this number grew to 80 million. Our daily and monthly active users quadrupled during the lockdown.
Currently we see about 20 million monthly active users. This is growing pretty fast because of the ongoing IPL match that has fueled the fantasy game right now. During this season we are acquiring a quarter of a million users every day.
Kr: What is the plan to make users come back to the platform after IPL is over?
SG: We understand a major chunk of the users coming on the platform for fantasy sports, which is understandably the flavor of the season. We have a two-pronged strategy to grow the user-base once the IPL season is over. One is, for serious fantasy players we will continue to add and engage them with other sports events that are going on. While what really gets covered is marquee events like IPL, there is always multiple cricket league happening all around the world. We believe a lot of serious fantasy gamers would love to participate in these.
For non-serious fantasy users who are only interested in playing when there’s an India match, we want to continue engaging them in other games like rummy that is also a real-money game. For casual games, we would be organizing free to play tournaments in popular games such as ludo, chess, snooker, and other such games.
Secondly, we also have e-sports. We have had a pretty interesting first half of the year with e-sports, where we did the country’s biggest clash royale tournaments. Currently we are doing a world of warship tournament. We had announced Garena’s Free Fire India championship earlier this year, which was postponed due to the pandemic, but we plan to schedule it soon.
So, we have these e-sports tournaments planned in partnership with game publishers to engage existing and new users.
Kr: E-sports hasn’t really picked up in India. How much time would it take for this market to flourish in the country?
SG: The good news is we are growing really fast. A lot of macro factors are fueling the growth. Things like data availability and mobile payments are helping it grow. Although, there is a lot of ground to cover, especially if you compare it with a larger market like the US and China, where the industry is probably 20 times bigger than ours.
It would take three to five years to get there. In the past couple of years, we have seen interest coming in not from just sponsors, but also even publishers who never looked at the India market. They have started having conversations with local platforms about having some local presence. These are definitely positive signs.
Kr: How is the participation from smaller towns?
SG: You would be surprised to see the traffic coming from tier 2 and 3 cities. It’s not just in e-sports or casual games but in fantasy sports as well. Around 60% of the winners in fantasy sports every week hail from smaller towns rather than metro cities. That’s the power of skill-based gaming which truly democratizes the game. One need not be from an affluent background or have any sort of training to win the game.
Kr: Paytm had earlier said it would launch in Southeast Asia, Bangladesh, and Sri Lanka. But that hasn’t happened yet.
SG: We still have these markets on our radar. The platform works in a way that’s very easy for it to integrate and partner with publishers from other markets. We just concluded a pilot with Grab where we have our games running on their app in Indonesia. Post-IPL we would start working on how to best take our products to Southeast Asia.