“With the government’s decision of levying 28% GST, the unit economics of gaming is impacted in our India business. Hence, by entering into Brazil, we are solving for marketing, distribution, and alternative revenue source through export for over 100 Indian game developers,” Rathore said.
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Brazil is the fourth largest gaming market in the world with a user base of 90 million users and a levy of indirect taxes such as 2-5% as municipal tax. The largest economy in Latin America has witnessed a significant surge in the popularity of mobile gaming with about 4.6 billion mobile game downloads in 2022, the company said in a statement.
“In India, an average player who spent Rs.10 per day in one game session of 45 mins, is now required to put in Rs.100 to play for the same duration of casual entertainment,” Rathore said. “This has been catastrophic and we’re already witnessing a decline of 10-15% in our users, deposits and time spent on the platform, despite our efforts to compensate through discounts that have an impact on our P&L and unit economics.”
ET had reported earlier this week that gaming platforms are rolling out deposit offers and bonuses to encourage gamers to load their wallets before 1 October and keep them hooked on the platform.
Rathore said that WinZO is currently taking a hit on its financials to sail through the catastrophe, but these measures are not sustainable in the long term. “Although our foray in Brazil was on the anvil for the past couple of months, it comes at a strategically crucial time,” she added.
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WinZO, which describes itself as the ‘Netflix of Gaming‘ is one of the largest casual games platforms created by over 100 Indian developers. It has a 150 million active user base in India.Back in August, the real-money gaming industry was jolted by the government’s levy of 28% GST on money invested in gaming deposits instead of winnings. This, along with 30% TDS (tax deducted at source) has been a death knell for the industry which will impact gaming influencers, platforms and game developers in the long run.