Online gaming firm Gameskraft recently revealed its annual results for financial year 2022-23. The results showed a quarter-fold increase in operational revenue, which stood at Rs 2,622 crores. There was a 24.8% increase in revenue, as the previous period reported Rs 2,133 crores.
The expenditures, on the other hand, had a negative impact, as they went from Rs 893 crores in 2022 to Rs 1,301 crores in FY23. This increase of 45.7% in expenses was a result of burdens of legal-cum-professional, domain hosting, gateway commissions, and other charges.
However, the burden of expenses led to a staggering increase in profits amounting to Rs 1,062 crores. The period preceding FY22 reported Rs 930 crores profit, thereby indicating an increment of 14.2% in FY23. According to Entrackr, the firm also made unrealized gains amounting to Rs 69.6 crores on selling off its mutual fund holdings.
NEW: Gameskraft numbers are incredible. The company posted Rs 2,662 Cr in revenue and Rs 1062 Cr profit in FY23. It operates a slew of apps including Rummy Culture, Playship, Pocket 52, RummyPrime, Ludo Culture, and Rummy Time. A 🧵 on its FY23 numbers…
— jaivardhan (@jaivardhan88) December 5, 2023
Advertisements and promotions took the biggest bite of Gameskraft’s overall expenses, thereby consuming 47%. The Bengaluru-based startup has also posted a slight increase in overall expense to earn a rupee. In FY22, Gameskraft spent 42 paise to earn a rupee, which increased to 49 paise in 2023.
Gameskraft, RMG industry faces tough times post GST amendments
For the unversed, Gameskraft operates multiple real-money gaming (RMG) platforms. Some of these include Rummy Culture, Playship, Pocket 52, Rummy Prime, Ludo Culture, and Rummy Time. However, recent implementation of 28% GST on online gaming activities affected revenues of not just Gameskraft, but the whole industry.
Amidst impressive results, Gameskraft has tough times ahead as the firm is battling GST demand notices. Directorate General of GST Intelligence (DGGI) sent the company a notice amounting Rs 21,000 crore. The matter will be listed in the Supreme Court for hearing on December 15.
Gameskraft however, is not the only company to receive GST as other firms like Dream11 and Mobile Premier League (MPL) as also facing similar issues. Additionally, many firms in the sector were also forced to make lay-offs and restructuring their organizations, respectively.
Smaller firms, who couldn’t withstand the latest GST amendments, had to shut down or temporarily suspend their operations.