Users to take a hit as gaming cos navigate GST challenges

Firms are working on new monetization models that are likely to be rolled out by FY24-end

- Shouvik Das

Real-money game startups, commonly known as online gaming firms, may pass on a part of the higher goods and services tax (GST) rate to the users, or will have to take a hit in their profits. Consequently, several firms are working on new monetization models that are likely to be rolled out by the end of this fiscal year.

Speaking with Mint, Trivikraman Thampy, cofounder and co-chief executive of gaming unicorn Games24x7, said the company is currently in the process of finding the right operating model that would help soften the taxation blow, while keeping the impact on users minimal. "Our focus right now is to figure out the right business model under the new GST regime. Of course, our operating margin will take a hit due to the increased tax rate. In the short run, there will be an impact (on users and profitability). But, our focus is on FY28, and we see plenty of opportunities for growth in the next five years."