PokerBaazi’s Parent Company Moonshine Technology Defies Industry Trends With Impressive Growth in FY24

India’s real-money gaming (RMG) industry faced a turbulent 2024, with regulatory changes and shifting player preferences creating a challenging landscape. While fantasy sports saw a slump, other gaming verticals with higher average revenue per user (ARPU), like poker and rummy, showed steady growth. Leading the pack is PokerBaazi, reporting robust growth and proving that strategic planning and a strong brand can overcome even the toughest challenges.

Moonshine Technology, the parent company of PokerBaazi, recently filed its FY24 financials, and the numbers are impressive. Last September, the publicly listed Nazara Technologies made a splash with its staggering ₹982 Crores investment in Moonshine Technology, acquiring a 47.7% stake in the company. This move signalled confidence in the online gaming sector and followed Moonshine’s stellar financial performance in FY24, reflecting Nazara’s strategic push to capitalize on the booming RMG industry.

Moonshine Technology’s Financial Highlights

Moonshine Technology reported a 55% surge in operating revenue, reaching ₹415 Crores in FY24, up from ₹268 Crores in FY23. Including ₹9 Crores earned primarily from interest on bank deposits, the company’s total income reached ₹424 Crores, a significant jump from ₹273 Crores the previous year. This financial upswing highlights Moonshine’s effective strategy and operational excellence.

Profitability also saw a boost, with profits growing by 26.30% to ₹24 Crores in FY24, compared to ₹19 Crores in FY23. The company’s financial health is evident in its impressive 20% return on capital employed (ROCE) and a solid 10.1% EBITDA margin.

PokerBaazi: The Revenue Powerhouse

PokerBaazi, the driving force behind Moonshine’s success, contributed over 85% to the company’s revenue, solidifying its position as a market leader in Indian online poker. Its success can be attributed to a user-friendly app, an engaging gaming experience, and aggressive marketing strategies. The fantasy sports platform SportsBaazi contributed 12%, while the multi-game platform CardBaazi provided a smaller share.

The company strategically invested in advertising, which represented 60% of its total expenditure. Advertising costs grew 83% to ₹232 Crores in FY24, while employee benefits rose 62% to ₹89 Crores. In FY24, spending on employee benefits doubled from ₹10.16 Crores in FY22 to ₹20.88 Crores in FY23, reflecting the company’s commitment to its employees and its broader operational expansion. Despite increased operational costs, Moonshine managed to maintain a healthy expense-to-earnings ratio of ₹0.94.

Challenges and Opportunities in the RMG Sector

The RMG industry faced its share of challenges in 2024, particularly due to the 28% Goods and Services Tax (GST) on deposits. However, unlike other platforms that struggled, PokerBaazi exhibited remarkable resilience and growth. This success is a testament to its robust business model and strategic market positioning, which allowed it to not only withstand but thrive under the new tax regime. They even managed to offset some of the increased tax burden by increasing rake and continued to invest in aggressive marketing strategies. And while competitors faltered, PokerBaazi hosted some of the biggest and most ambitious tournaments and promotions, cementing its place as the undisputed market leader.

While the broader online gaming market, particularly fantasy sports, experienced mixed results, poker emerged as a shining star. Moonshine, through PokerBaazi, capitalized on this trend with significant monthly increases in user engagement and revenue, particularly in the competitive Indian market.

Fantasy Sports, Rummy, and Casual Games

Fantasy sports, once a cornerstone of the RMG industry, saw a decline, with industry revenue from commissions dropping to ₹8,800 Crores in 2024 from ₹11,000 Crores in 2023. Despite this, fantasy sports rebounded 28% month-on-month in November 2024, driven by high engagement in international leagues and marquee events.

Poker platforms, on the other hand, recorded a 54% growth in gross gaming revenue (GGR), rising to ₹2,100 Crores in 2024 from ₹1,800 Crores in 2023. PokerBaazi posted a 4% month-on-month increase in November 2024, fueled by organic user growth and ambitious promotions like the ₹25 Crores GTD GOAT. Other platforms, such as Junglee Poker and PokerStars, grew 1% month-on-month, focusing on organic acquisitions and cutting advertising budgets.

Rummy’s GGR grew modestly by 6% year-on-year to ₹16,000 Crores in 2024 but saw an 8% month-on-month decline in November. Casual games emerged as a growth leader with a 71% year-on-year GGR increase to ₹4,300 Crores in 2024.

GST Regulations and Industry Impact

The online gaming sector faced headwinds due to a 192% increase in GST taxation on player deposits. Despite this, Net Gaming Revenue (NGR) improved to 35% of GGR by Q3 2024, as platforms adapted by optimizing expenses and enhancing profitability. Marketing budgets were trimmed industry-wide, reflecting the need for sustainable growth strategies.

While Moonshine made strides, competitors like MPL also showed growth, reporting a 22.2% increase in revenue to ₹1,068 Crores in Q2. Vision 11 grew 53% month-on-month in November 2024. However, Dream11, Gameskraft, and A23 have yet to file their FY24 financials.

Despite a 42% year-on-year decline in monthly active cash users (MACUs), the average revenue per user (ARPU) rose 64% in November 2024. This was driven by a shift from fantasy sports to poker, rummy, and casual games with higher user spending levels.

Outlook and Strategic Initiatives

Looking ahead, Moonshine Technology’s prospects are bright. With Nazara’s investment, the company is well-positioned to leverage its market leadership in poker to explore new opportunities and potentially expand into other gaming verticals and international markets. The collaboration aims to drive innovation, boost user engagement, and enhance the gaming experience, aligning with the broader objectives of both Moonshine and Nazara to lead the RMG sector in India and possibly beyond.

This detailed overview of Moonshine’s financial achievements highlights the company’s strong performance amidst challenging market conditions and underscores the strategic significance of Nazara’s investment as a catalyst for future growth and expansion in the rapidly evolving gaming industry.