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Analysing Listed New Age Tech Companies - A Blog Series (#2) >>> Understanding Gaming: Through the Lens of Nazara
Analysing Listed New Age Tech Companies - A Blog Series (#2) >>> Understanding Gaming: Through the Lens of Nazara

April 9, 2023

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Analysing Listed New Age Tech Companies - A Blog Series (#1)

Understanding Gaming: Through the Lens of Nazara Technologies

 

Gaming industry is a new leader in media and entertainment sector. Global gaming market is nearly $180 Bn and expected to reach ~$220 Bn by 2024. If we talk about the key reasons its:

  • Rising per capita income ($18380 in 2021)
  • Increased smartphone penetration (from 52% to 90% in 2023E)
  • Higher GenZ and millennial population

The business models, strategies, and critical metrics that help us understand how a given sector performs and operates, however, are just as significant. Sharing such important topics below:

Business Models:

Sports Gaming: A segment that is the USP of Nazara and represent ~50% of their revenue. India’s strong love for sports are perfectly explored by Nazara to build a segment on esports naming NODWIN and sportskeeda.

Kids Learning Games: Targeting kids gaming market has a huge potential and linking it with education makes it more interesting and scalable. The scalability is visible from the success of Nazara in this segment that is generating ~1/3rd of company revenue.

Telecom + Value added services: Collaborating with telecom player to offer value added service as  apart of package is also gaining popularity and help attracting towards games but also towards the platform. A win-win for both the telecom company and gaming company

Money Gaming: A trend that has been picked up after the success of Dream11, hence Nazara also saw a long-term opportunity in this segment and expect to scale it further. Currently its generating only 5% of total revenue

Freemium: Opportunities also lies with the player who don’t want to pay and hence for them freemium model is available. This helps in increasing the number of user and company can earn by advertising during this free offering.

 

Business Strategy:

  • Operating in countries with large addressable market
  • Building on intellectual property
  • Pursue more strategic acquisitions
  • Retention of customers
  • Global expansion leveraging the existing distribution network
  • Build the existing technology stack to enhance existing platform
  • Strong global distribution network

 

Key Metrics used in Gaming Industry:

Monthly Active Users (MAU): It counts the number of users who engaged with your product in a meaningful way in the last 30 days.

Paid Subscriber Base: A client must pay a recurrent cost on a regular basis in order to receive a good or service

Monthly Average Revenue Per User (ARPU): Average income produced by each active user of your app during a specific time period ($6.3 to 6.7 for Nazara)

Monthly Churn: percentage of customers lost over the course of a month(5-6% for Nazara)

Cost Per Trial: ($33-36 for gamified early learning)

Retention Rate: Determines how many clients a business keeps over a specific amount of time.

Trial Activation Rate: (70% for Nazara’s business segment- Kiddopia)

Average Rating on App Store: (4.34/5 for Kiddopia)

Activation Ratio: The percentage of persons that successfully complete a certain milestone in your onboarding process is measured by activation rate (70% for gamified early learning)

Average Time Spent: 5:03 (minutes: seconds) for Sportskeeda

The research and figures above are based on data about Nazara Technologies that is currently accessible. Only a few variables are flexible for other gaming firms.

 


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