BENGALURU: Real-money gaming firms have started shelling out 30-40% more to acquire users in the past year due to increased competition, experts tracking the space said. Real-money games are ones that charge an entry fee from players, unlike casual games that primarily depend on advertising revenue. For these companies, user acquisition spends include cashbacks, advertising, money spent on brand building and referrals.
Card-based games like rummy and poker, from companies such as Adda52, RummyCircle and Ace2Three, were part of the first wave of realmoney games in India.
Fantasy sports and quizzing games from companies like Dream11 and Mobile Premier League (MPL) are among those that are driving the second wave.
MPL counts Times Internet, part of the Times Group which also publishes this paper, as an investor, along with Sequoia Capital and Go-Ventures, the investment arm of Indonesian ride-hailing company Go-Jek.
Firms are spending Rs 150-250 to acquire a user for fantasy gaming, but the costs go up to Rs 700-1,500 for a highvalue user, said multiple people tracking the space. In the poker and rummy industry, the average cost of acquiring a user is between Rs 3,000 and Rs 5,000, sources said.
There are currently about 20 million fantasy gamers in India, and that is expected to rise to 100 million by year-end, according to a report by IFSG-KPMG.
The real-money gaming market is expected to grow at around 50-55% by 2022, reaching $1.5-1.7 billion from $250-300 million currently, according to RedSeer Consulting.
“These games are becoming popular by word-of-mouth and have built their own niche and network of gamers,” said Ujjwal Choudhury, the director of RedSeer Consulting.
One reason why acquisition spending is higher now is because of the friction involved in attracting users since these games are not allowed on mobile app stores such as Google Play. This, essentially, means the gaming companies are unable to tap into a section of gamers.
However, India’s higher transaction volume makes it attractive for game makers who can bypass the commission that they pay to Play Store.
Advertising has been another constraint. Until recently, Facebook and Google did not allow ads from realmoney gaming firms. This made these firms advertise on digital platforms like social media sites and video streaming services to attract new users from tier II and tier III cities.
Another roadblock is the inability to track users, gaming company founders told ET. Adda52 CEO Naveen Goyal said users change platforms depending on offers and other benefits, making them difficult to track.
A lack of standard regulations for the sector is also a major concern.
“The inconsistency in law has been a bottleneck for the industry. An objective standard for the determination of skill and chance in games would help,” said Anirudh Rastogi, founder of Ikigai Law firm.