Nazara Technologies acquires Classic Rummy for Rs 186 crore

Nazara Technologies Limited announced that it has acquired a 100% stake in Hyderabad-based skill gaming company OpenPlay for a total consideration of INR 186.4 crores.

OpenPlay operates a multi-game consumer gaming platform under the “Classic Games” brand which hosts popular skill-based games and operates the highest standards of technology, game fairness, advanced player protection, security, AML, and advertising standards.

OpenPlay currently has an annualized gross gaming revenue run rate of INR 80 Cr and is operating on EBITDA positive margins. With its recent launch of influencers-hosted skill gaming tournaments, the company is poised to grow its user base at a rapid pace in the coming quarters.

Says Nazara CEO Manish Agarwal, “The OpenPlay acquisition offers an opportunity for Nazara to build a network of skill gaming destinations operating on one common tech platform under the proven leadership of Sreeram and his team at OpenPlay. Sreeram is a successful entrepreneur globally in online real money gaming and we are excited that he will be leading Nazara’s growth in this sector.”

OpenPlay is led by Sreeram Reddy Vanga who is a serial entrepreneur in the global online gaming industry. In his previous avatar, he founded and led CozyGames to become the second-largest Bingo network in the UK before being acquired. Sreeram was also part of the early team at PartyGaming which went IPO on the London Stock Exchange in 2005.

Sreeram Reddy Vanga says, “I’m excited to join the ‘Friends of Nazara Network’ and look forward to working closely with Nazara leadership and the Network to build India’s largest vernacular social gaming and entertainment platform. Our technology complemented by Nazara’s positioning in the gaming industry in India is the perfect combination for this endeavor.”

The “Friends of Nazara” network comprises established gaming companies in which Nazara holds majority stakes and works actively with existing founders and management teams to rapidly achieve scale. These companies include Nodwin Gaming and Sportskeeda in Esports Next Wave Multimedia, developer of World Cricket Championship (WCC), the largest mobile-based cricket simulation game, and Paper Boat Apps, developers of popular gamified early learning app Kiddopia.

Last month, Nazara announced its un-audited standalone and consolidated results for the quarter ended 30th June 2021, posting a net profit of Rs 13.6 crore. Nazara has diverse business segments with revenue generation happening across gamified learning, Esports, freemium, and telco subscriptions.

The company had reported a loss of Rs 21.7 crore in the April-June 2020 period. Its revenue during April-June 2021 jumped 45 percent to Rs 131.2 crore, compared with Rs 90.5 crore in the year-ago period, news agency PTI reported.

The esports segment’s revenue doubled to Rs 53.2 crore, while that of Gamified early learning segment grew about 46 percent to Rs 52.1 crore in the June 2021 quarter from the year-ago period.

EXCLUSIVE: Nitish Mittersain On Nazara Technologies’ IPO & Future Plans 

Revenue from freemium, telco subscription and real money gaming stood at Rs 5.8 crore, Rs 17.9 crore, and Rs 2.2 crore, respectively, in the reported quarter.

Commenting on the performance, Mr. Manish Agarwal, Group CEO, said “The Q1 FY22 results revenue growth and especially enhanced EBITDA margins demonstrate intrinsic strength & profitability of the underlying businesses across all of three growth segments. However, we will continue to prioritize strategic growth over margin optimization to ensure that we continue to achieve and maintain leadership in the segments we operate. Nazara continues to see strong consumer and partner interest across each of our segments and business KPIs across segments continue to remain healthy in this quarter which will further help in reinforcing the leadership position of the Company across esports, gamified learning, and cricket simulation mobile games. The recent acquisition of a majority stake in Publishme will further amplify our presence in MENA region. The acquisition will focus to build local execution capabilities cutting across key growth segments of freemium, gamified learning, and esports.”Business key performance indicators across segments continue to remain healthy in this quarter, which will further help in reinforcing the leadership position of the company across e-sports, he said.

In June, Nazara had announced the acquisition of a 69.82 percent stake in Publishme, the largest mobile game publishing agency in the Middle East and Turkey, for about Rs 20 crore.

A separate filing by the firm on Friday said Nazara Technologies FZ–LLC, a wholly-owned subsidiary of the company (in Dubai), has incorporated ”Publishme Global FZ-LLC” as a wholly-owned subsidiary in Dubai Media City, thus making Publishme Global FZ-LLC a step-down wholly-owned subsidiary of the company.

The entity has been incorporated for carrying out activities including digital content creation, gaming and e-sports, media and marketing services, media and marketing consultancy, and news media, it said.