Tag: online gaming

BGMI Maker Krafton India Urge for Support Measures to Promote Online Gaming

Krafton India, makers of the popular online game BGMI, on Thursday pitched for government support measures to promote the online gaming industry in the country. 

Krafton India CEO Sean Hyunil Sohn highlighted subsidies given to gaming companies for labour costs by countries like the UAE and Canada and stated that innovative ways can be found to promote the industry in the country.

“Data shows actually how governments around the world regard gaming business as one of the future growth drivers for job creation… we all know that India needs more tax revenue to develop the country, but at the same time, I hope that the Indian government can find creative ways to promote the industry,” he said while addressing a CII event on digital gaming here.

The GST Council has imposed a 28 percent tax on the full face value of bets placed on online games, which will be implemented from October 1, with review of the levy after six months of its implementation.

India’s inexpensive internet and mobile penetration will grow gaming in India and create opportunities for gaming companies, Sean said as he highlighted the “unique advantage” Indian gamers have of being mobile-native unlike their western counterparts who moved to smartphone gaming from consoles, personal computers, and arcade gaming.

“Indian gamers are now at 500 million with true gamers in the range of 100 million which is not as big as China or South Korea, but given the very inexpensive cost of mobile internet and wide penetration of smartphones, I think the number of gamers will increase very fast and… open up more opportunities for gaming companies like us,” he said.

He said that the Indian market is “pretty sizeable” for top games like BGMI and “heavily skewed” to top players compared to other gaming markets. However, diversification and the evolution of the gaming industry will result in more players coming up, he opined.

The Krafton India CEO also spoke about the company’s investment in Gurugram-based Nodwin Gaming, saying that “90 percent of Nodwin’s revenue is coming from mobile eSports gaming events”.

He said the gaming industry has grown from being a small industry in the entertainment market to “about 80 percent of the movie and video game industry combined.

SONY India National Head PlayStation Division Prosenjit Ghosh said gaming is becoming a mainstream kind of entertainment, “almost at par with other mainstream entertainment in India like cricket or movies.” 

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Hike Lays Off Over One-Fifth of Workforce Due to GST Raise on Online Gaming

Kavin Bharti Mittal-founded Hike, which owns Rush Gaming Universe, has laid off about 55 people — more than one-fifth of its total workforce — to absorb the impact of the GST hike on online gaming, a top company official said on Thursday.

The development comes within a week of gaming unicorn Mobile Premier League (MPL) laying off about half of its India team or close to 350 people to cut down cost burden due to the increase in GST to 28 percent.

“About 55 people, out of which 24 are non-full-time employees. Closer to 22 percent. Business is in the best shape ever but this 400 percent increase in GST is a bazooka pointed at us. We’ll need to absorb some of it and as a result the reduction in workforce at Hike/Rush,” Hike Founder and CEO Kavin Bharti Mittal said.

The entire team of Hike is engaged in the development of Web3 gaming platform ‘Rush Gaming Universe’.

Investors in Hike include Tencent, Foxconn, Bharti Group, Tribe Capital, Polygon, Flipkart co-founder Binny Bansal, serial entrepreneur Bhavin Turakhia, Cred Founder Kunal Shah.

The gaming platform claims to have 5.2 million monthly active users and distributed over $308 million (nearly Rs. 2,545 crore) to winners annually.

A couple of small-size gaming start-ups like Quizy have announced to shut down their business.

Industry body All India Gaming Federation (AIGF) in a statement early this week said that with over 400 percent increase in GST liability, a vast majority of entrepreneurs who had innovated in the sector would be disproportionately impacted with many of MSMEs and startups going out of business. 

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Online Gaming Tax: 28 Percent GST to Be Levied From October 1, Review After 6 Months

The decision to impose a 28 percent tax on the full face value of bets placed on online games will be implemented from October 1 even though there was demand for a review from states like Delhi and Goa, finance minister Nirmala Sitharaman said on Wednesday.

The GST Council — the highest decision making body of the new indirect tax regime that comprises Union finance minister and representatives of all states — discussed the language of amendments that will be needed to enabling taxing online gaming, she said after the panel meeting.

The panel had at its last meeting decided to levy a 28 percent GST on full face value of bets placed and Wednesday’s meeting was to deliberate on the tax law changes that would be required to implement it.

Sitharaman said Delhi finance minister opposed the levy of the tax on online gaming while Goa and Sikkim wanted the levy on GGR (gross gaming revenue) and not on face value.

Sitharaman, however, said other states ranging from Karnataka to Gujarat, Maharasthra and Uttar Pradesh wanted the decision taken at the last meeting to be implemented.

The new levy, after required changes are made in the central and state laws, is likely to come into effect from October 1, she said.

There would be a review of the levy after six months of its implementation, she added.

Last month, India decided to impose a 28 percent tax on funds that online gaming companies collect from their customers for every bet, shocking the nascent industry which is backed by global investors.

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China Has Resolved Its Youth Game Addiction Problem, Top Industry Body Claims

China has resolved the problem of game addiction among its youth, a report co-written by the country’s top gaming industry association said, in remarks likely to be welcomed by the regulations-battered sector. The comment came from a report by the China Game Industry Group Committee, affiliated with the online game publishing regulator, China Game Industry Research Institute and data provider CNG, CNG said on its official WeChat account on Tuesday.

Chinese regulators in September last year stepped in with new rules barring anyone under 18 from playing video games for more than three hours a week, a stringent social intervention that it said was needed to pull the plug on a growing addiction to what it had described as “spiritual opium”.

A month later, Chinese state media stated that loopholes allowing minors to bypass new rules aimed at curbing gaming play time to three hours per week should be removed to “prevent addiction.”

“On some online trading platforms, there are game account rental and sales businesses, users can bypass the supervision by renting and buying accounts and playing online games without restrictions. This means that there are still loopholes for teenagers to enter online gaming, which is worthy of attention,” a commentary in the Communist Party’s official People’s Daily newspaper said at the time.

The move came as part of a broad regulatory crackdown against the Chinese technology sector and was seen as an effort to also tighten controls over the gaming industry, which was hit soon afterwards with a lengthy title approval freeze.

CNG said the report found that more than 75 percent of young players now played games for less than 3 hours a week and praised Chinese game companies for achieving “remarkable results” after setting up systems to curb game addiction.

It cited efforts from Tencent Holdings, NetEase and Perfect World, among others.

© Thomson Reuters 2022

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E-Gaming Federation Announces to Challenge Tamil Nadu’s Ordinance to Ban Online Gaming

E-gaming Federation will challenge an ordinance issued by the Tamil Nadu government to ban online gaming as it categorises rummy and poker as games of chance, the industry body said on Wednesday.

E-gaming Federation (EGF), whose members include Games24x7, MPL, and Junglee Games, cited Supreme Court order which, according to the industry body, has settled rummy as a game of skill.

“Bringing rummy under the ambit of a game of chance is directly in violation of the Supreme Court judgments and the Madras High Court judgment which overturned the law banning online games including rummy and poker,” EGF said in a statement.

Tamil Nadu had promulgated an ordinance to prohibit online gambling and regulate online games in the state and said an online gaming authority will be established to exercise powers conferred by this ordinance.

The authority will regulate online games, issue certificates of registration to local online game providers besides identifying online games of chance – rummy and poker – and oversee the functioning of online game providers in the state, among other things.

“After examining the ordinance, we have decided to file a lawsuit as it categorises rummy and poker as games of chance. This is in dissonance with multiple legal judicial pronouncements including the recent judgment by the Madras High Court, which has clearly segregated games of skill and chance.

“The Supreme Court and several high courts have reaffirmed the status of skill-based games as legitimate business activity and the state must take cognizance of these judgments in developing an enabling gaming policy that safeguards players than resorting to a ban,” EGF CEO Sameer Barde said in the statement.

EGF said that the need of the hour is a comprehensive online gaming policy that protects players and ensures that only legitimate online skill-gaming operators offer their services while weeding out the ones who break the law.

The industry body said that the Indian gaming market is expected to grow from current $2.2 billion (nearly Rs. 18,300 crore) to $5 billion (nearly Rs. 41,500 crore) in revenue by 2025. 

 

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