This year’s IPL feels eerie—ghostly crowd noises from past tournaments are piped into our living rooms. It makes one wonder if the players are real or everything’s a fantasy.
The games are real, but there’s no denying the lead role of fantasy sports in IPL 2020, which had to be postponed as covid became a pandemic in March. That a mega-tournament could be shifted to UAE within six months, despite the withdrawal of past sponsors, is mainly due to fantasy sports apps stepping into the breach, with Dream11 as title sponsor. A slew of them parade in at every ad break.
That IPL materialised was equally a dream come true for fantasy sports startups because they depend on mega events on the ground to engage fans in creating virtual teams and paying money to enter contests linked to performances of real players. The money they’re splurging on sponsorship and marketing is more than compensated by their increased visibility, earnings and the hundreds of millions of dollars that their backers are betting on them.
Dream11 raised $225 million in funding recently from Tiger Global and others on top of its $100 million round in 2018, which was led by Chinese gaming and social media giant Tencent. MPL, a platform for fantasy sports and competitive gaming, announced a $90 million funding round last week on top of the $40.5 million it had previously raised from Sequoia and others. Sponsorship in a marquee event quells qualms investors may have about backing an activity that is still in a regulatory grey area.
Race for users
It’s a race among fantasy sports apps to acquire users. It doesn’t help that Google has kept them out of its play store. “Our policies don’t allow online casinos or support any unregulated gambling apps that facilitate sports betting, including daily fantasy sports in India,” it says.
What the apps have in their corner, however, are India’s biggest cricket icons who persuade newbies to get an SMS link to download the app directly. MS Dhoni dons the gloves for Dream11, Virat Kohli bats for MPL, and Sachin Tendulkar has come out to play for Paytm First Games. BCCI president Saurav Ganguly leads the promotion of My11Circle.
Dream11 is the leader of the pack and a unicorn. It’s also the oldest one, having been around from way back in 2008, the year when IPL started. The fast-rising is two-year-old MPL, which differentiates itself by deploying fantasy sports and competitive gaming. It has 70 games on its platform, including the popular cricket game WCC, where players compete against one another with real money.
“A modified short version of WCC is on MPL, for those who like that format of playing, as it is an additional avenue for monetization,” says Rajendran PR, co-founder and CEO of Nextwave Multimedia, creator of WCC. The game developer and MPL share the revenue which comes mainly from the difference between money lost by players and what the winners get.
The platform play has led to a user base exceeding 60 million and over 2 billion cash transactions on the MPL app to date. “Fantasy is a quarter of our business, so we’re not dependent on real-life events as much as other fantasy apps,” says Shubh Malhotra, co-founder of MPL.
At the outset, when MPL started out, it licensed games from developers. Then, as its user base grew, it moved to a revenue share model. “Once we proved a product-market as revenue was getting generated, content started flowing in from developers,” says Malhotra, adding that the revenue share also proves far more lucrative for developers than renting out the game.
Developers can monetize their games by selling them, getting subscriptions or from competitive gaming where players pay money to compete with one another. It’s the last one that’s proving the biggest hook and money-spinner. “We generate good revenue for more than three-quarters of our game developers,” says Malhotra. “Some of them will end up generating a million dollars in revenue from our platform.”
MPL held an online chess tournament in partnership with the Karnataka government recently, to provide relief from the proceeds to those affected by covid. “Over 1.5 lakh players participated in our covid chess tournament,” says Malhotra.
Each player paid a registration fee of ₹50 and the cumulative prize money was ₹10 lakh. The difference between the collections and winnings works out to ₹65 lakh, which went for relief in this case. But the scale and money-making scope explains why investors are queueing up to back fantasy sports and competitive gaming platforms.
Sumit Chakraberty is a Consulting Editor with Mint.