Nazara Technologies Limited: history, ownership, mission, how it works & makes money

A Brief History of Nazara Technologies Limited

Nazara Technologies Limited was founded in 2000 by Nitish Mittersain. Initially, the company focused on developing mobile content for games, gradually expanding its portfolio to include a variety of gaming genres and platforms.

In 2016, Nazara Technologies acquired the mobile gaming company, **Nextwave Multimedia**, which bolstered its presence in the gaming industry. This acquisition was a significant step as it added over 50 games to Nazara's portfolio.

By 2019, the company marked its entry into the public markets by filing for an IPO to raise funds for further expansion. The IPO was launched at a price band of ₹1,100 to ₹1,101 per equity share, with the offer size being approximately **₹582 crores** (around $78 million). The IPO was well-received, with oversubscription of **175 times** for retail investors.

Nazara went public on March 17, 2021, and its shares were listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). On the listing day, shares surged by **80%**, closing at ₹2,008.50, giving the company a market capitalization of approximately **₹6,700 crores** (around $910 million).

As of FY2023, Nazara Technologies reported revenue of **₹629 crores** (approximately $84 million), representing a year-on-year growth of **58%**. The company's net profit stood at **₹63 crores** for the same period. It has been investing heavily in strategic partnerships and acquisitions to enhance its gaming portfolio, including the acquisition of **Helios Games** and **Sportskeeda**, a gaming and esports content platform.

As of October 2023, Nazara has expanded its international footprint, penetrating markets in Africa and the Middle East, which contributed to approximately **20%** of its revenue.

Nazara's primary segments include mobile gaming, esports, and gamified early learning, reflecting its diverse approach to capturing the gaming market. The company has established relationships with several global partners, significantly enhancing its content library and user base.

In line with its growth strategy, Nazara Technologies aims to continue expanding through both organic growth and strategic acquisitions, targeting a broader demographic of gamers worldwide. The company's focus on innovation and technology has positioned it as a leader in the Indian gaming industry, with plans to leverage emerging technologies such as AR and VR in gaming experiences.

A Who Owns Nazara Technologies Limited

Nazara Technologies Limited is a prominent player in the gaming and sports entertainment industry in India. As of September 2023, the company operates with a diversified ownership structure comprising individual and institutional investors.

The largest stakeholders in Nazara Technologies include founders, venture capital firms, and institutional investors. Notably, the key shareholder is Nitish Mittersain, the co-founder and Managing Director, who owns approximately 21.37% of the company's equity shares.

Another significant contributor to the ownership structure is the private equity firm, Sequoia Capital India, which has a stake of around 18.53%. This investment underscores the confidence that major investors have in Nazara's growth strategy and market potential.

Institutional ownership is also noteworthy. As of the latest filings, mutual funds and foreign institutional investors collectively hold around 35% of Nazara’s outstanding shares. This includes investments from prominent entities such as ICICI Prudential Mutual Fund and Franklin Templeton Investments.

As of the latest reports, Nazara Technologies has reported a market capitalization of approximately ₹3,000 crores (~$400 million). This valuation reflects the growing interest in the gaming sector, especially amidst a surge in mobile gaming adoption in India.

The company's revenue for FY2023 stood at approximately ₹470 crores, marking a year-on-year increase of 32%. This growth is fueled by strong performance in its esports and gamified learning segments.

Furthermore, Nazara Technologies has expanded its user base significantly, boasting over 200 million users across its various platforms. This user engagement provides a solid foundation for future revenue generation through advertising and in-app purchases.

The diverse ownership structure of Nazara Technologies is indicative of its strategic vision, with substantial backing from both private and institutional investors who recognize the company's potential within the evolving gaming industry landscape in India.

Nazara Technologies Limited Mission Statement

Nazara Technologies Limited, a prominent player in the gaming and sports media sector, articulates its mission as “to bring game-based learning and entertainment to the children and young adults around the world.” This mission focuses on providing engaging content that blends education with entertainment, thereby enhancing learning outcomes through interactive gaming experiences.

The company aims to expand its reach across various geographies, tapping into the growing market of digital gaming and education. As of fiscal year 2023, Nazara reported a revenue of INR 708.31 crore, reflecting a robust year-on-year growth of 31%. This financial performance underscores the effectiveness of its mission to engage young audiences through innovative gaming solutions.

In line with its mission, Nazara has diversified its portfolio, which includes educational games and eSports platforms. The company's flagship educational product, “Kidopia,” recorded a user base of over 1.5 million subscribers as of September 2023, demonstrating its commitment to fostering educational growth through play.

The alignment of Nazara's mission with global educational trends creates significant opportunities for growth. The global online gaming market is projected to reach approximately USD 196 billion by 2025, with educational gaming gaining increasing traction among younger demographics. Nazara is strategically positioned to leverage this trend, aiming for a larger share of this expanding market.

Moreover, the company's recent acquisition strategy has fortified its mission-driven approach. In late 2022, Nazara acquired Think360, an ed-tech platform, enhancing its capabilities to deliver educational content. This move is part of Nazara's strategy to integrate education into gaming, aligning perfectly with its mission statement.

As the company continues to expand, its mission will be crucial in guiding strategic decisions, investments, and innovations aimed at enriching the learning experiences of its users. With a vision towards global outreach, Nazara Technologies Limited is set to redefine the intersection of gaming and education.

How Nazara Technologies Limited Works

Nazara Technologies Limited operates in the gaming and sports media sector, focusing primarily on mobile gaming. Founded in 2000, the company has evolved to become a prominent player in the Indian gaming industry and has expanded its footprint globally. As of March 2023, Nazara Technologies reported revenue of ₹720 million, with a year-on-year growth rate of 40%.

The company’s operations are segmented into various categories, including:

• Mobile Gaming
• Esports
• EdTech (Educational Technology)
• Media & Broadcasting

Mobile Gaming Segment

Nazara's mobile gaming segment constitutes the largest share of its revenue. As of fiscal year 2022, this segment generated approximately ₹500 million, accounting for around 69% of total revenue. The company has developed and published a range of games, including the popular cricket game "Nazaraplay".

Esports

The esports division has garnered significant attention. In 2023, Nazara launched the "Nodwin Gaming" platform, which facilitated numerous tournaments. The esports segment contributed ₹150 million in revenue, equating to a growth of 23% from the previous year.

EdTech

Nazara’s EdTech initiatives are aimed at providing interactive learning experiences. It leverages gaming technology to enhance educational practices. Their flagship product, "Khel Khel Mein," has registered over 500,000 downloads since its launch, generating revenue of approximately ₹70 million in FY 2022.

Media & Broadcasting

In the Media & Broadcasting sector, Nazara has entered partnerships with various media outlets to promote gaming content. This segment is in its nascent stage but has the potential to grow, generating about ₹20 million in FY 2022.

Financial Performance Overview

The company is strategically positioned in a rapidly growing industry. The mobile gaming sector in India is expected to reach a valuation of approximately ₹10 billion by 2025, growing at a CAGR of 28% from 2020 to 2025.

Business Model

Nazara's business model focuses on a mix of direct game publishing, subscription services, and ad revenues. As of 2023, subscription revenues accounted for around 15% of total revenues, while advertising revenues contributed approximately 18%.

The company has also adopted a growth strategy through acquisitions. Notable acquisitions include "Nodwin Gaming" and "Think360." These strategic moves aim to enhance market share and diversify offerings in the gaming ecosystem.

Market Trends and Future Outlook

With a growing acceptance of mobile gaming among the Indian population, Nazara Technologies is well-positioned for future growth. The increasing penetration of smartphones and improved internet connectivity further bolster this trend. The gaming market's expected CAGR of 30% over the next five years provides a promising outlook for investors and stakeholders.

Nazara Technologies remains focused on innovation and expanding its portfolio through investments in emerging technologies such as augmented reality (AR) and virtual reality (VR), which are anticipated to revolutionize user experiences in gaming.

How Nazara Technologies Limited Makes Money

Nazara Technologies Limited, a prominent player in the gaming and sports media industry in India, generates revenue through several key business segments. Each segment capitalizes on different monetization strategies, tailored to their respective markets.

The primary revenue streams include gaming subscriptions, in-app purchases, advertising, and e-sports. As of the fiscal year 2022-23, Nazara reported a total revenue of ₹623 crore, marking an increase of 42% year-over-year.

Revenue Breakdown

The gaming subscription model provides users with premium content and experiences. This service has been a critical growth area, particularly among mobile gaming consumers. The company reported a significant rise in active subscribers, hitting approximately 1.5 million by the end of FY 2022-23.

In-app purchases contribute significantly to Nazara's revenue, particularly through its popular games such as "WCC" (World Cricket Championship), which has seen over 100 million downloads. These purchases include character upgrades, new features, and virtual goods, which incentivize users to spend money within the games.

Advertising revenue, which includes monetization through ad placements in their games and apps, reached ₹130 crore. This continues to grow as the user base expands, with a monthly active user count exceeding 50 million as of Q2 2023.

Nazara's e-sports division is a rapidly growing segment. The company has invested in various competitive gaming tournaments, driving engagement and potential revenue through sponsorships and partnerships. The e-sports revenue was ₹68 crore, attributed to various events and collaborations.

Market Trends and Forecast

The Indian gaming market is projected to reach USD 3 billion by 2024, with a compound annual growth rate (CAGR) of 30%. Nazara is positioned to capitalize on these trends due to its diverse product offerings and strategic acquisitions.

Moreover, Nazara has expanded its footprint through strategic acquisitions, such as the purchase of Nextwave Multimedia and Publishers of the WCC franchise, enhancing its game library and subscriber base significantly.

In conclusion, Nazara Technologies Limited demonstrates a robust business model that leverages diverse revenue streams, an expanding user base, and a growing industry to sustain its growth trajectory. The comprehensive diversification into various segments, combined with strong user engagement metrics, positions the company favorably in the competitive landscape of gaming and media.