These companies say absorbing a 30% service fee plus 28% goods and services tax will be a double whammy of sorts and will not be sustainable for any business. They are also considering various options to mitigate the impact.
Under a pilot programme, Google had allowed a few RMG apps to list on Play Store for free. After running the pilot for two years, it has said a commission would be charged from June and that the marketplace would be opened to all RMG apps.
Delisting themselves from Play Store to avoid paying the commission will not be an easy decision for the apps given the scale and access that the Android maker gives to the 568 million mobile gaming population in India, industry executives said.
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“For an industry which is already absorbing the world’s highest taxes, it would be particularly hard to pay additional service fees as they are trying to get their unit economics right,” a gaming company executive told ET.
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Internationally, even betting apps such as Draftkings and FanDuel in the US and Bet365 and Skybet in the UK continue to operate on Google Play Store without any service fee, this executive said. “Is it then a fair ask to further try and extract from a sunrise sector which is under pressure,” he asked.“Countries with a more stable real-money gaming ecosystem continue to enjoy free distribution of their product on Play Store for many years. Indian RMG is just trying to find its feet,” he said, asking: “Shouldn’t Google support instead of playing the role of an adversary.”
Google had launched the pilot with rummy and daily fantasy apps in India. In January, when Google said it would allow more RMG operators (likely poker platforms) to list their apps on Play Store starting June 30, the tech giant said it would also “evolve” its service fee model.
This means companies could face a levy of 15-30% on their revenue.
Listing on Play Store has brought immense scale to RMG apps with the top ones such as Dream11 Fantasy raking in 50 million downloads. Other apps like Rummy Circle and My11 Circle (by Games 24X7) and Teen Patti (by Octro Inc) have 10 million downloads each. Rummy Culture (by Gameskraft), MPL Rummy (by MPL) and A23 Rummy (by Head Digital Works) each gained 5 million downloads.
Dream11, MPL and Games24X7 as well as Google India did not respond to ET’s queries till press time.
The All India Gaming Federation, the sector’s representative body, said Google’s move to allow more skill gaming apps on its platform would help new developers compete with the incumbents by substantially bringing down user acquisition costs.
“We believe that Google should employ supportive policy around fee structures as well as onboarding process, making the process equitable while resulting in greater competition and consumer choice,” federation chief executive Roland Landers said.
However, some people believe this may even prompt large platforms to operate outside Google’s Play Store.
“Yes, the scale, the reach does add up but at the same time, this is the sector which has been operating on its own for over a decade since it wasn’t allowed on Play Store,” another executive said.
“But now, with the service fee, the earlier non-Play Store distribution may make more sense from a unit economics perspective, forcing operators to go back and divert funds from user acquisition to other channels,” this person added.