Online gaming company CEOs term Google’s 30% tax as ‘extortionist’ at Consilience 2023

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Major gaming company CEOs expressed their concerns over the 30% tax imposed by Google on gaming apps, calling it ‘extortionist’, at a panel discussion held at Consilience 2023, organized by the Law and Technology Society (L-Tech) at National Law School of India University (NLSIU) in partnership with All India Game Developers’ Forum (AIGDF).

Manish Agarwal, Co-Founder, IndiGG, stated that the 30% tax on gaming apps is unfair. “The 30% jagirdari tax is an extortion and I believe in India we should not allow anybody to do this, especially when you’re not an Indian company,” he said.

Agarwal pointed out that in a country like India, the focus needs to be to increase its propensity to pay and reduce friction in spending among consumers. Adding an extra 30% tax on top of the Goods and Services Tax (GST) is a significant expense for consumers, which he believes is unproductive from a gamer’s perspective.

Anuj Tandon, CEO – Gaming, JetSynthesys, expressed a similar sentiment. “When app stores and play stores were launched, the 30% fee was revolutionary compared to the 70% charged by OEMs or Telcos for game developers. At that time, it was a very good idea, but as the industry and business models have evolved, there needs to be a relook at the rates,” he added.

Sai Srinivas, Co-Founder & CEO, Mobile Premier League (MPL) highlighted that the 30% commission may be viable in advanced markets like the US, but for India, it is crucial to ensure that Indian game developers receive more revenue to invest in game development and build more games.

“Let’s evaluate the unit economics: if a developer charges 100 rupees, 30 rupees go to the play store or app store and 70 rupees goes to the developer. From that 70 rupees, they have to pay for hosting, user acquisition, and other expenses. My view is that we should provide Indian game developers with more revenue to invest in game development and build more games,” explained Srinivas.

Sean Hyunil Sohn, CEO, Krafton Inc. India, called for proper intervention by the government and encouraged the development of competition from third-party stores, supported by consumers.

Consilience 2023 marked the first conference of its kind to be held in the wake of the notification of the new online gaming rules by the Ministry of Electronics and Information Technology (MeitY). The conference shed light on the legal and regulatory requirements that must be met, growth strategies to be adopted, and policy needs for the industry to reach its full potential.

The conference explored topics such as online gaming regulations, taxation of gaming and new business opportunities that gaming companies can leverage. Speakers included Akshat Rathee – Co-Founder, Nodwin Gaming; Anupriya Sinha Das – Head of Corporate Development, Nazara, and Rachit Rastogi – COO, Good Game Exchange (GGX), Joyjyoti Misra, Group General Counsel, Gameskraft; Ritika Chatterjee – General Counsel, Mayhem Studios, and Arun Prabhu – Partner, Cyril Amarchand Mangaldas.

The panels were expertly moderated by professors of NLSIU like Dr. Betsy Rajasingh (Associate Prof, NUJS) who has expertise in Intellectual Property and Technology Law, Professor Sanyukta Chowdhury, who specializes in tax, Professor Rahul Singh, Associate Professor of Law at NLSIU, whose expertise lies in corporate affairs and competition law and Dr. T.S. Somashekar, Professor of Economics, NLSIU.

“Consilience has always been a syncretic conference bringing together different perspectives on law and technology. This year, we are proud to host it with AIGDF and bring in the perspective of business into the intersection of Law and Technology,” said Shikhar Sharma, Convenor of the Law and Technology Society 2022-23.