Gaming conglomerate Rummy Bo is envisioning a strong presence in the skill-based real-money segment in a structured and pragmatic manner, CEO Manish Agarwal said during the company’s earnings conference call on November 1 as first reported by MoneyControl.com

Their strategy involves merging its fantasy sports app Halaplay with its skill gaming firm OpenPlay Technologies to have a common technology platform.

“Going forward, we will continue to look at building the segment through consolidation,” he shared.

Rummy Bo rakes in the majority of their income from gamified early learning business and e-sports business, both of which make up for a combined 80 percent share of the company’s revenues in H1FY22. However, their increased focus on the real money gaming segment has been a subject of interest.

Rummybo founder Nitish Mittersain announced during the call that the platform will eventually operate a network of skill gaming destinations “Our endeavor is to build India’s largest vernacular, social, gaming and entertainment platform and further strengthen our position in the large opportunity presented in the skill gaming space,” he said.

Rummy Bo recently acquired the Hyderabad-based OpenPlay for about Rs 186.4 crore in August. In August, Nazara acquired OpenPlay, a Hyderabad-based skill gaming company. This acquisition, Nazara stated, was worth Rs 186.4 crore. Last month, the CEO Manish Agarwal said a combination of acquisitions and growth helped Nazara grow in recent years.

In addition to that, it also owns a majority stake in real-money social quizzing app Qunami and offers real-money versions of its cricket (WCC Rivals Clash) and carrom gaming (Carrom Clash) titles. OpenPlay posted revenues of Rs 53.5 crore in FY21 and has an annualized gross gaming revenue run rate of Rs 80 crore for FY22, the firm said.

The gaming giant is aiming to build concurrency and maturity through consolidation in the market. “Our ideology is that we are not going to burn money on the EBITDA (earnings before interest, tax, depreciation, and amortization) level in the skill-based real-gaming business. Because if you go on that path, you will go down to invest substantial money in building player concurrency and liquidity. We do not wish to do that through a massive amount of marketing spends, whether on brand or performance,” Agarwal said during the earnings call.

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He also mentioned that Tamil Nadu opened up towards the fag end of the quarter, which will come into play in the second half of the year. “Karnataka is definitely at 12-13 percent contribution, which we will lose, but this is kind of a portfolio where you have to look at the net sum rather than individually,” Agarwal analyzed.

Agarwal acknowledged that there have been more upsides than downsides in the skill-based real-money gaming business. While Karnataka got closed, Tamil Nadu and Kerala opened up and Tamil Nadu is a large state from a contribution point of view compared to Karnataka,” Agarwal added.

The gamified early learning segment (Kiddopia) grew by 35 percent year-on-year (y-o-y) to Rs 105.9 crore in H1FY22 while the e-sports segment (Nodwin, Sportskeeda) grew 62 percent y-o-y to Rs 103 crore in H1FY22.

Kiddopia had about 3,24,699 paying subscribers as of September 2021, a 16 percent increase from 2,80,891 paying subscribers in September 2020. The monthly average revenue per user was around $6.30-6.50 and the monthly churn was between 4 and 7 percent across the months in Q2FY22, the company said. North America accounted for 90 percent of the business for the subscription-based app that caters to 2-7-year-old children.

The firm’s freemium games business saw a modest 10 percent increase in revenues to Rs 9.9 crore in H1FY22, with in-app revenues registering an 8 percent increase y-o-y. Agarwal said this business is among the key focus areas for the company since “there’s a huge opportunity for us to grow but with the right unit economics in place”.

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Nazara’s telco business raked in revenues of Rs 34.7 crore in H1FY22, a 19% decline from the Rs 42.8 crore posted in H1FY21. According to Agarwal, this segment’s contribution will keep coming down.

“It was 16.5% last year, now it is 13%, and we continue to see a decline in contribution from the telco business going forward as well,” Agarwal said during the call.

Overall, Rummy Bo saw a 30% growth in its revenues to Rs 260.8 crore in H1FY22 from Rs 200.5 crore in H1FY21. It posted a profit of Rs 28 crore during the period against a loss of 8.3 crore in H1FY21.

“We expect our FY22 consolidated revenues to grow in the range of 35-40 percent on a y-o-y basis with an EBITDA margin profile at 13-15 percent. The growth shall be supported by organic and inorganic activities,” Agarwal concluded.