At the time when the real money gaming industry is reeling under the impact of the GST Council’s decision to hike the GST rate to 28%, gaming startup Gameskraft crossed the INR 1,000 Cr mark in consolidated net profit in the year ended March 31, 2023.
On the back of strong growth in its business, Gameskraft’s profit rose 14.2% to INR 1,061.9 Cr in the financial year 2022-23 (FY23) from INR 930.4 Cr in FY22.
Founded in 2017 by Prithvi Raj Singh, Deepak Singh, Rajkumar Taneja, and Sindhu Devi Jha, GamesKraft operates real money gaming platforms such as RummyCulture, RummyPrime, Playship, Pocket52 and LudoCulture.
The startup primarily earns revenue from facilitation of gameplay in the form of commission or platform fees charged to the users as a fixed percentage of the amount they spend as entry fees.
Gameskraft’s revenue from operations jumped 24.8% to INR 2,662.5 Cr in FY23 from INR 2,133.1 Cr in FY22.
Including other income, total income rose xx% to INR 2,732.1 Cr from INR 2,153.2 Cr in FY22.
Where Did Gameskraft Spend?
Gameskraft’s total expenses soared 45.7% to INR 1,300.7 Cr in FY23 from INR 892.8 Cr in FY22.
Advertising and Marketing Expenses: The startup’s marketing expenses saw a sharp rise of 346% to INR 408.57 Cr in FY23 from INR 91.51 Cr in FY22, accounting for the biggest portion of the total expenditure. Its business promotion cost also rose 96% to INR 208.1 Cr in FY23 from INR 106.4 Cr in the previous fiscal year.
It must be noted that the costs incurred by the company towards free games and contribution towards player prize money in case of tournament are recorded as an expense and reported as part of advertisement, promotional and marketing expenses.
Employee Cost: Employee benefit expenses continued to account for a significant share of the startup’s total expenditure. Employee costs increased 57% to INR 374.9 Cr from INR 208 Cr in FY22.
While the startup posted a rise in its top and bottom lines, the numbers pertain to the period before the GST Council’s decision to hike GST for real money gaming. Following the GST Council’s decision, Gameskraft decided to discontinue its fantasy offering, Gamezy Fantasy.
GamesKraft is also among the gaming majors that received GST notices from the government. In September, the Supreme Court stayed Karnataka High Court’s judgment, which quashed a goods and services tax (GST) notice against Gameskraft for alleged tax evasion to the tune of INR 21,000 Cr.
The post Amid Tax Woes, Gameskraft’s FY23 Profit Jumps 14% To Cross INR 1,000 Cr Mark appeared first on Inc42 Media.
