Indian game developers, studios cash in on investor interest

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Venture capital (VC) firms have invested aggressively in gaming firms, mostly fantasy and multi-gaming platforms, in India over the past two years. Dream11, MPL, and Games24*7 have turned into unicorns in recent times. MPL recently launched a game development studio Mayhem based in Bengaluru.

Now, smaller game development firms are starting to catch the eye of investors in the country. Investors, founders and game developers said that investments in these firms are set to rise in the coming months according to a report on LiveMint. Mayhem recently announced the development of a battle royale game with an Indian theme.

Recently a Bengaluru-based startup Bombay Play, raised $7 million in a Series A round last month, led by Kalaari Capital to build social games. Another local game developer, Lila Games, raised $10 million in March to build a mobile games studio. The company is also developing a free-to-play mobile shooter game.

In March, game streaming platform Loco announced a $42 million funding round where the Narayana Murthy family office participated. Loco said the funds will be used to strengthen content and focus on web3 development. M42 Esports, last year announced that it would invest $750,000 in India’s esports ecosystem.

According to Salone Sehgal, general partner at Lumikai, a gaming-focused VC fund, a significant part of funding went into real money gaming early on during the pandemic. However, investors have diversified their capital in the last 6-8 months, moving into game streaming, content and infrastructure providers, she said. “We have seen a lot more domestic interest from VC, a lot more international interest from strategics who are actively scouting companies in the Indian market,” said Sehgal.

Oliver Jones, the chief executive officer (CEO) of Bombay Play, felt that VC firms “are starting to wake up as the spell of web3 and real money gaming is starting to pass”.

“Gaming has historically been countercyclical. Investors are realizing that the content business is more dependable, and parking money in businesses like us will lead to more assured returns,” he said.

Sehgal said more than 1,000 deals have taken place in the last 18 to 20 months, with 500 to 600 of these in the gaming content space. “It is a mix of independent studios building mid-core games, and PC games, but most of them are building mobile and casual games,” she said speaking to LiveMint.

Dhruva Interactive, a Bengaluru based developer was acquired by the popular GTA developer Rockstar Games in May 2019. Last year Swedish gaming firm Stillfront Group acquired Moonfrog, a Bengaluru-based independent game studio, in February 2021. In July 2021, word games startup PlaySimple was acquired by another Swedish gaming company, Modern Times Group, for $360 million.