Metaverse and gaming tech company OneVerse has acquired online poker startup Spartan Poker and earmarked $120 million (~Rs 1000 crore) for mergers and acquisitions targeted towards real-money gaming companies in India. The sector is currently reeling under cost pressures of high taxation and customer retention.
OneVerse, backed by family offices and its founder’s capital, shall invest in M&A of nearly 13 RMG companies across poker, rummy and fantasy gaming over the next three months, its chief executive told ET.
The first among these is Spartan Poker, an online poker business acquired by OneVerse for an undisclosed sum. Spartan Poker is an online gaming platform which hosts poker tournaments entailing a prize pool of over Rs 500 crore each year.
“The recent macroeconomic headwinds have unlocked momentum for M&A opportunities and the company is looking to close a few additional acquisitions in the next three months,” Paul Michael, CEO of OneVerse Gaming told ET.
He added that the company would further look at expanding in the Europe and America market as well.
“With this large M&A round, we want to create a scale which is able to sustain in the long run with proper strategies on player retention while also creating meaningful value for the gaming house,” Michael said.
He added that so far the industry has seen a reduction of 15% in users who have given up gaming due to the taxation impact.
The firm is being advised by Rand Merchant Bank, a leading global corporate and investment bank and is registered in India as RMB Capital India Private Limited. It has advised several firms including the Aditya Birla Group, Cipla, Vikram Solar etc.
There are close to 568 million users of online games in India, of which nearly 25% pay-and-play. As of FY23 RMG segment in online gaming was almost a $2 billion industry.
ET had reported last month that the RMG business model has become unsustainable for several startups and mid-sized companies after the government hiked GST to 28% applicable on the full face value of betting amounts for monies being used for online gaming, casinos and racecourse.
The larger players such as Dream11, Games 24X7 continued to subsidize the new tax liability through deposit offers and bonuses by taking a hit at their own books. While these schemes and offers were not new, it is the cost of these credits which swelled up nearly three-fold for platform providers.
Source: Economic Times