The latest acquisition that you have made is Trinity Gaming. It cost just around Rs 24 crore. What is the acquisition strategy going forward? Have you earmarked a certain amount that you are looking at deploying, and certain capabilities that you are looking at adding?
Nitish Mittersain: It is important to understand that Nazara operates the M&A flywheel at two levels. One is what the parent entity does, which is areas that we want to enter. But also, many of our subsidiaries are cashflow generating companies, accumulating cash, many of these are asset-light businesses which do not require to deploy a lot of cash for organic growth and therefore, we help our subsidiaries also learn our M&A playbook and help them deploy. This particular transaction that you are talking about, Trinity Gaming, is related to M&A done by our esports arm, Nodwin Gaming and it is an influencer platform that kind of sends in Nodwin’s reach to the relevant youth. Nodwin has been building a very large esports ecosystem and you should think of them as a pied piper to the youth. In today’s world, attention of the youth is very valuable and that is what Nodwin through our esports initiatives is able to garner and take advantage of.
From an overall Nazara perspective, we recently concluded another fundraise of Rs 855 crore. Many marquee investors have come in, including SBI Mutual Fund, and also well-known tech entrepreneurs, such as Mithun Sacheti of Caratlane. We are very excited about deploying this capital into future growth. Inorganic growth has been an important part of our growth opportunities and we will use these new funds to drive that growth going forward.
You have answered both the questions talking about the fundraise as well as the acquisition. I just wanted to understand what the outlook is as well with the latest news that you have integrated with ONDC to launch gCommerce. You will be integrating e-commerce within games. How is that going to work?
Nitish Mittersain: The thought process is that India has over 500 million gamers, people playing on their mobile phones every day, and that is a very large audience. It is among the largest in the world. However, in terms of monetisation through in-app purchases or through advertising, India is still very low. We do not even feature in the top 10 in global ranks. So, what do we need to do here to grow the monetisation of gaming in India? We need to find India-first novel approaches. And one thought we had as Nazara is that if we can integrate e-commerce into gaming, deliver relevant opportunities for shoppers to buy what they want while they are engaging with the games, that could lead to a very interesting and new monetisation model. With the whole India stack opportunity with platforms like ONDC emerging, a lot of initiatives are very helpful in being able to experiment such innovations. It is an innovation right now. It is a concept. We are starting to deploy it in the Q4 of FY25, which is Jan to March and we will see how that pans out over the next year.
Let us also talk a little bit about your revenue growth projections. I know you do not want to give any concrete numbers, but are you on track to continue to build on that, that 10X revenue growth over the next five years and what is going to lead to that?
Nitish Mittersain: Anything less than that would be disappointing and we should see what all we can do to achieve it, that is exactly what we are doing and all our teams are geared towards it. As of now, we are well on track to achieve our stated goal of an Rs 300 crore EBITDA in FY27, and we are very focused on achieving that.
What has been the kind of deployment of AI in your business, because that is something which is impacting all the companies, whether tech or non-tech. Specifically with respect to Nazara, the gaming verticals and the rest of the verticals as well. How are you looking at adopting AI or is it going to be something of a disruptor of sorts for you as well?
Nitish Mittersain: No, we look at AI as a very big opportunity for us and we have created an AI task force internally, which is very actively working on all aspects of gaming which can be reinvented with an AI-first approach. What we are really doing is we have kind of broken down each component of game development and my teams are working on reinventing these through AI-first approaches, testing them on smaller studios of ours and then expanding it to all the studios that we operate.
In terms of benefits over here, AI would allow us to deliver a lot more content on gaming in a much faster and cost-effective manner as that can lead to cost optimisation over a period of time, as well as improved monetisation because the velocity of content being delivered increases. Especially if we own IPs, we can develop a lot more content around these IPs. Also, player engagement, player monetisation, data analytics, a lot of these aspects will get significantly enhanced using AI. So, it is a very exciting time and any company in gaming, if it is not looking at AI, would definitely get disrupted, but we are very much on it.What about the profitability and growth ahead for Nodwin as they continue to invest in new events, new IPs, what is in store?
Nitish Mittersain: Nodwin is scaling well and many of the new IPs that they bought, including Comic Con, etc, have been expanding very well from four or five cities to eight-nine cities next year. We are seeing very good traction and in terms of the EBITDA margins of Nodwin, we think from next year onwards they will start focusing on optimising some of those margins as well. Till now, the focus has been to reinvest a lot into growth, which they have achieved well. They built a very large ecosystem in the esports arena and the alignment is there and we will start focusing on improving EBITDA margins going forward.
