Nazara Technologies is a sum of many parts that don’t quite form a seamless whole, and therein lies the problem. 

The homegrown esports and online gaming major grew a paltry 4.6% in FY24, in what has been its steepest decline in revenues and profits since the company went public in early 2021. Nazara, though, remains India’s only publicly listed gaming company to date, boasting a market cap of Rs 6,830 crore. The times, however, are a-changin'. 

The inflated user bases of post-pandemic times that powered gaming companies to new heights have diminished. People have reverted to their old habits and spend less time on gaming screens. Children have gone back to schools, bringing down the once-high appeal of gamified learning apps—in Nazara’s case, a slowdown in its subsidiary Kiddopia has been a major growth deterrent. 

And then came the unfavourable regulatory environment, with India’s new GST rule for real money gaming (RMG) platforms derailing Nazara’s growth in a key vertical. Esports, too, operating under NODWIN Gaming, which accounts for over half of its revenue pie, has been slow to take off in India and continues to struggle to grab ad dollars from cricket. 

By the numbers: Nosediving profits

In the last quarter of the year ended March 2024 (Q4FY24), Nazara saw its consolidated profits decline a staggering 98% to Rs 18 lakh from Rs 9.4 crore in the year-ago quarter. Its operating revenues, too, contracted by 8% year-on-year (YoY) to Rs 266.2 crore, marking the sixth successive quarter of growth deceleration for the company. Operating margins, meanwhile, shrunk to 0.6%.