From Esports to Education: Nazara Technologies Expands its Empire With ₹196 Crores Investment

Nazara Technologies, India’s only listed diversified gaming and sports media company, is making some seriously bold moves. They’ve just announced a ₹196 Crores investment across five different companies, showing they’re not afraid to diversify and expand their reach. This comes on the heels of their Q2 FY25 financial results, where they reported a 7.30% year-on-year revenue growth to ₹318.94 Crores but a 32.80% decline in net profit to ₹16.24 Crores due to rising operating costs.

Busy Monday at #Nazara!

Announcing 5 strategic investments totaling nearly INR 200 cr:

• 60% stake in Funky Monkeys Play Centers – expanding into children’s play/entertainment zones

• First AI investment in https://t.co/ZNsHy5OmYU – AI-powered, gamified learning

• Growth… pic.twitter.com/tQ9xlOurhe

— Nitish Mittersain (@mittersain) December 2, 2024

Nazara isn’t just chasing quick wins; they’re playing the long game. Nitish Mittersain, the company’s Joint MD and CEO, sees these investments as building blocks for sustained growth over the next few years. It’s a smart approach, especially considering how India’s gaming landscape has been shaken up recently.

Navigating the GST Storm

The GST changes in October 2023 hit the gaming industry hard, but Nazara was able to weather the storm better than giants like Delta Corp and Dream11. This is because they had little exposure to the real-money gaming sector, which was most impacted by the new regulations.

Breaking Down the Investments

Let’s take a closer look at where Nazara is putting its money:

Funky Monkeys Play: Nazara is making its first foray into offline entertainment with a 60% stake in Funky Monkeys, a chain of indoor play centres for kids, for ₹43.70 Crores. Mittersain outlined plans to scale Funky Monkeys from 11 centres to potentially 50 or even 100, envisioning hybrid engagement models that integrate digital interactivity into physical spaces, potentially incorporating popular digital IPs like Kiddopia. “The founders have operated this business efficiently through challenging times like COVID-19, and we see significant potential in expanding this format,” he added.

Learntube.ai: Nazara is also entering the world of AI-powered education with Learntube.ai. They are investing ₹4.20 Crores for a 4.70% stake in this platform, which already has over 2 Million users and focuses on teaching professional skills through interactive and personalized learning. Mittersain noted, “AI is an imperative for all companies, and this investment aligns with our vision to integrate AI into our digital offerings to create engaging and impactful experiences.”

Nodwin Gaming: Nazara’s esports subsidiary, Nodwin Gaming, is getting a major cash injection of ₹64 Crores via Optionally Convertible Preference Shares. This will help them develop new IPs, expand into new markets, and enhance their operations. Mittersain has high hopes for Nodwin’s continued growth and dominance in the esports market, especially with their recent acquisition of Trinity Gaming for ₹24 Crores.

Sportskeeda: Nazara is going all-in on Sportskeeda, its sports content platform. They’ve invested ₹69 Crores to acquire the remaining 9% stake from employee stock options, bringing their total ownership to 100%. This move follows their earlier acquisition of a 19.35% stake in Absolute Sports (the parent company of Sportskeeda) for ₹145.5 Crores in September, which brought their total ownership to 91% at the time. Nazara is clearly positioning Sportskeeda as a key player in sports media.

Datawrkz: Nazara’s ad-tech arm, Datawrkz, is also getting a funding boost of ₹15 crores for compulsorily convertible cumulative preference shares. This strategic investment will allow Nazara to integrate advertising technology with its broader gaming and entertainment ecosystem. Mittersain sees Datawrkz as a key component in Nazara’s overall revenue strategy.

The Big Picture

These investments paint a clear picture: Nazara is building a comprehensive gaming and entertainment empire. They’re creating a network where these companies can work together and capitalize on synergies to unlock more value.

Looking Ahead

Nazara is clearly in it for the long haul. They’ve raised a significant amount of capital this year, demonstrating their financial strength. While their recent Q2 results showed a 7.30% year-on-year rise in revenue to ₹318.94 Crores and a 32.80% drop in net profit to ₹16.24 Crores, they are confident that these investments will pay off in the long run.

Mittersain addressed concerns over recent financial performance, noting, “It’s important to understand that we are setting the stage for growth for the next three years. Quality of revenue is very important to us, and we are confident about delivering stronger results in the quarters to come.”

As Mittersain succinctly put it, “This is not just about incremental growth. It’s about laying the groundwork for a much larger and impactful platform in gaming and entertainment.”

By diversifying its portfolio and embracing new technologies, Nazara is setting itself up for a bright future. They’re not just another gaming company; they’re pioneers in a world where digital and physical experiences are merging, and they’re definitely a company to watch in the coming years.