Esports to be Nazara Tech’s FY23 top revenue earner

Online gaming company Nazara Technologies, which saw esports contribute 49 percent of its overall revenues in the Fiscal Year 2022 (FY22), expects the segment to continue to be the largest in the Fiscal Year 2023 (FY23).

The esports segment saw its revenue increase from Rs 1,701 million in the Fiscal Year 2021 (FY21) to Rs 3,039 million in the last financial year.

The company, which reported its Q4 FY22 results on May 13, reported 37 percent growth year-on-year in operating revenues to Rs 6,217 million in FY22 versus Rs 4,542 million in FY21. Nazara’s profit after tax grew from Rs 136 million in FY21 to Rs 507 million in FY22.

The company had expected esports to become the largest segment in the second half of FY22 after it contributed 40 percent to the overall business of Nazara Technologies and saw 62 percent growth in revenue in the first half of FY22.

This was higher than its largest segment — gamified early learning — which contributed 41 percent and saw 35 percent growth in revenue during the same period.

“The tailwind for esports is strong. As an industry, we are still in infancy. There is lot of growth yet to happen. We have been making investments in the space.” Nitish Mittersain, Joint MD, Nazara Technologies, told Moneycontrol.

“We bought OML IP, Rusk Media. We want to distance the gap between us and the second player. Hence, we are in a hyperactive growth phase.”

“We have strong momentum and have a good base of Rs 300 crore to build on. Revenue contribution from esports in the overall pie will continue to be largest in FY23.”

He is also counting on offline events in the esports segment, which had taken a hit due to COVID-19.

“The big challenge was that in the last two years there were no offline events and that was a dampener for business. Having said that, things have started in terms of offline events and we will see a good contribution from them in FY23, which will help the growth of esports,” Mittersain added.

He said that the Asian games choosing esports as a medal event was a game-changer and a strong signal that esports is becoming a mainstream sport. However, the Asian Games, which were scheduled to take place this September, have been postponed due to a fresh COVID-19 wave in China.

The esports sector saw its revenue increase by 29 percent from Rs 7.5 billion in 2020 to Rs 9.7 billion in 2021. The number of esports players doubled from 3 lakh in 2020 to 6 lakh in 2021, according to an EY-FICCI 2022 report.

Source: Moneycontrol