Delhi-based online gaming startup WinZO reported a 70% increase in operating revenue, reaching 1,055.2 crore rupee (US$124.71 million) for FY24.

Its adjusted net profit rose 2.5 times to 315 crore rupee (US$37.23 million), up from 125 crore rupee (US$14.77 million) the previous year.

The results reflect only six months of the revised 28% Goods and Services Tax (GST) on gross receipts, effective since October 1, 2023. The full impact is expected in FY25.

WinZO’s user base grew to 250 million, supported by its multi-gaming platform and developer-led monetization model. In 2023, WinZO expanded its operations to Brazil, offering localized gaming experiences in 16 languages.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Regulatory resilience amidst taxation headwinds

Winzo’s 70% revenue growth during a period of significant regulatory challenges stands in stark contrast to broader industry trends following the implementation of the 28% GST on total deposits.

An EY-USISPF survey found that 58% of gaming companies reported revenue stagnation or decline after the GST amendment, with some facing up to a 50% drop in revenue 1.

This regulatory burden has led to documented job losses and hiring freezes across the sector, with many companies struggling to maintain profitability as the indirect tax consumes a significant portion of their operating margins 2.

Finance Minister Sitharaman reported that the new tax regime generated ₹6,909 crore in just six months—a 412% increase in gaming tax revenue—confirming the substantial financial impact on the industry 3.

Winzo’s ability to grow despite these headwinds suggests either a more resilient business model or effective strategic pivoting, offering valuable lessons for companies navigating similar regulatory challenges.

2️⃣ Global expansion as a strategic response to domestic uncertainty

Winzo’s launch in Brazil represents a calculated diversification strategy that parallels measures taken by other tech companies facing regulatory turbulence in their home markets.

The timing of this international expansion is significant, coming precisely when the Indian gaming industry faces mounting challenges from the revised GST regime that took effect in October 2023 4.

This move allows Winzo to tap into multiple revenue streams while reducing exposure to any single regulatory framework—a crucial advantage when ₹1.12 lakh crore in disputed tax liability remains under Supreme Court consideration 4, 1.