Sports Business Newscast Ep.36

In episode 36 of Sports Business Newscast, I have very interesting updates about how brands are dominating the ad space on television during the ICC Men’s World Cup, I also have an update on the impact of the ongoing GST issues with gaming companies and its impact on gaming companies with a case study on WinZO’s international market entry and how it benefits them, I also cover some interesting statistics from the Niko Partners report on the Indian video gaming market potential and I wrap up the episode with a crisp case study on my favourite emerging alternative sport – Drone Racing League. 

So, let’s get straight into the updates…..

My first update is from the ICC Men’s World Cup and this time we focus on the records being broken off the field and on television. According to mFilterIT, an advertising traffic validation and analytics company, In the second and third week of the ICC Cricket World Cup 2023, matches featuring the Indian team saw 178 per cent more ad slots FEaturing food and beverage category brands than other matches. The F&B brands dominance was followed by online services, including shopping apps, OTT platforms, fantasy gaming apps, etc.  

mFilterIT’s data findings also reported that the India versus Pakistan match saw a 149 per cent increase in ad slots compared to India versus Afghanistan. The advertising opportunities for India matches surged to over 20 million viewers, and the India-Pakistan clash shattered all records, reaching an astounding 35 million. The viewership broke all records in the second week and the third week saw 43 million viewers tuning in to watch the live stream during the India-New Zealand game. 

This week’s second update concerns the ongoing tax demands issue with online gaming firms in India. The Indian government is on a mission to crack down on online gaming companies in India by issuing them retrospective Goods and Service Tax (GST) amounting to millions. 

It has now been reported that the Directorate General of GST Intelligence (DGGI) is set to issue tax notices to another 20-30 online gaming companies soon.

According to Financial Express, a government official confirmed that they have raised tax demands of over Rs 1.1 trillion via notices served on 20 firms.

In recent months, online gaming firms such as GamesKraft, Deltatech Gaming, Dream Sports (parent of Dream 11), Games24x7, and Head Digital Works have been served GST notices. According to industry estimates, the tax demands add up to Rs 1.1 trillion ($13.3 billion), almost five times the combined revenue of these companies, between FY19 and FY22.

This has led to gaming companies rethinking their India strategy.  One of India’s homegrown vernacular social gaming platforms WinZO recently announced the launch of their app in Brazil fearing the massive 400% hike in GST. This is the start of a shift in trends for Indian gaming companies.

Sticking to WinZO’s example, let me elaborate on why they are starting up in Brazil and why they are doing it in update number three. So, here are seven interesting statistics about WinZO’s Brazil plan is a smart move:

Brazil is the 4th largest mobile gaming market in the world with 90 million plus users. Also, in 2022 Brazil registered 4.6 billion game downloads on mobile phones. Statistics like these are a great prompt to consider it as a serious market.

WinZO have announced that they will invest $25 million in Brazil which will be spread across 100 partner game developers.

However, the main reason they are shifting base to Brazil is because of the 400% hike in GST. The tax they will be paying in Brazil is pegged between 2-5%  municipal tax on commissions earned by any company.

  For Update four we continue with gaming, video gaming in particular. This update is for all the video game makers who are looking to enter new global markets. If you are not looking at India as your next market, here are 6 incredible facts from the Niko Partners report that make you consider India in your new market entry strategy: 

• Niko Partners projects India video games revenue across all platforms to reach $868 million in 2023, up 21.2% YoY.
• India is a mobile-first market with 96.8% of total gamers playing on a smartphone or tablet.
• India’s video game market is the fastest growing by gamers and revenue, which is forecast to reach $1.6 billion by 2027, growing at a 5-year CAGR of 17.2%.
• The number of gamers in India across all platforms is forecast to reach 444 million in 2023, up 12.1% YoY.
• The number of gamers across all platforms in India is forecast to reach 641.2 million in 2027, growing at a 5-year CAGR of 10.1%.
• 31% of the 444.4 million gamers will spend on video games in 2023, with annual ARPPU reaching $6.38

The report also mentioned that India retained its title as the fastest-growing video games market in Asia in 2023 with the number of total gamers in India forecasted to have surged a remarkable 343% in the 10 years between 2017 and 2027, climbing to 641.2 million by 2027. 

Video games revenue is also on the rise, forecast to increase 21% YoY in 2023 to $868 million. Factors such as higher disposable income, the growth of internet connectivity, and low-cost smartphones are propelling India’s video games market forward.

These numbers are staggering and to add to the positivity BGMI and Freefire have made a comeback in India after a mammoth struggle, for certain is a positive sign for game makers to tease Indian gamers.

And, for our fifth and final update, I want to talk a bit about alternative sports that have now formed lucrative leagues in the US and one particular alternative sports league that stands out is the Drone Racing League (DRL).

In his newsletter Why Emerging Sports Leagues Stand a Chance, Andrew Petcash covered DRL amongst other emerging sports leagues in the US. The following stats just got me wondering about alternative sports and the new audiences in India. So, DRL is broadcast across 15 platforms in 140 markets worldwide. The 2021 championship match reached 21 million viewers on Twitter alone (for comparison, the 2021 NBA Finals on ABC averaged 9.91 million viewers), 70% of DRL fans don’t engage with the big five sports and here’s a big one – DRL’S TikTok account has 5 million followers, more than both the NHL and MLS.

Here’s a question to all the listeners, Do you think there is potential for an alternative/emerging sport to explode in India? If so, which one do think can become a massive hit in India?