Nazara Technologies Limited (NAZARA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Nazara Technologies Limited Q3 and 9 Months FY '24 Earnings Conference Call hosted by Prabhudas Lilladher Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from Prabhudas Lilladher. Thank you, and over to you, sir.

Yes. Good morning, everyone. On behalf of Prabhudas Lilladher, I welcome you all to the 3Q and FY '24 earnings call of Nazara Technologies. We have with us the management represented by Mr. Nitish Mittersain, CEO and GMD, Mr. Rakesh Shah, who's the Group CFO; Mr. Sudhir Kamath, COO and Anupriya Das, who's the Head of Corporate Development. A majority of the questions today will be taken by Mr. Nitish, Sudhir and Anupriya. I would now like to hand over the call to the management for opening remarks. Over to you, Nitish sir.

Hi, everyone. Good morning, and a very warm welcome to all of you to Nazara Technologies' Q3 and 9 months FY '24 earnings call. On this call, I'm joined by Sudhir Kamath, our Chief Operating Officer; Rakesh Shah, our CFO; Anupriya Sinha Das, our Head of Corporate Development; and SGA, our IR firm. We have uploaded our results presentation on the exchanges, and I hope all of you have had an opportunity to go through the same. For this quarter, our revenue stood at INR 320.4 crores and EBITDA grew by 24% year-on-year to INR 37.7 crores. We saw healthy growth in Animal Jam and Sportskeeda, resulting in our EBITDA increase by 24% year-on-year despite softer revenue growth on an overall basis due to some decline we have seen in our Adtech business as well as our Real Money Gaming business. Our EBITDA margin increased from 9.7% in Q3 FY '23 to 11.8% in Q3 FY '24 as we continue to push for higher margins in our business. Our eSports segment witnessed a remarkable 79% EBITDA growth year-on-year. For 9 months FY '24, we reported 9% year-on-year increase in revenues to INR 872.1 crores and EBITDA for the same period increased by 20% to reach INR 98.7 crores. Our overall EBITDA margins for the first 9 months have increased by 110 bps to 11.3%, and our PAT has climbed 44% to INR 74.6 crores. Our approach of acquiring global gaming IPs and leveraging focused user acquisition, along with data-driven product innovation is starting to pay off for us as demonstrated by Animal Jam's performance in Q3. When we acquired the WildWorks business we thought that we could make a good impact on it. And with all the hard work that has been put in by our team in the last few quarters, we're actually starting to see the results of the same. Now we're more confident that this playbook can be expanded and scaled up significantly and we will continue to try and replicate this in the coming quarters as well, potentially [indiscernible] studio acquisitions. We have also completed our FY '24 fundraising board. We had set ourselves a target of INR 750 crores. We managed to secure INR 760 crores through a preferential placement to marquee investors like Mr. Nikhil Kamath, SBI Mutual Fund and ICICI Prudential Mutual Fund. With significant cash reserves today, we are in an excellent position to pursue the exciting acquisition opportunities our team has identified. They have been working diligently for the last year on putting together many opportunities, and we hope to take some of these to the natural conclusion in the coming quarters. Our Nazara Publishing division has hit the ground running with its inaugural set of games going live soon. I think as a leading Indian company and also we are very focused on Make in India and For India. We are supporting a lot of Indian developers with this new initiative, and we hope to build a large user network through our Nazara publishing platform. Finally, this March, we are proud to lead the Indian delegation to GDC, San Francisco. This is the world's largest gaming conference and we are co-hosting the first ever India pavilion, marking a significant milestone for us as an Indian gaming community, which we believe gave the [indiscernible]. I would now like to hand over the call to Anupriya, who will give some highlights for performance in this quarter. With said, we will be happy to answer all your questions. Thank you very much.

Thank you, Nitish. Good morning, everyone. As you're all aware, Nazara operates across 3 business segments: Gaming, eSports and Adtech. We continue to be well diversified across demographics, geography and business models. Gaming contributed to 36% revenue and 56% EBITDA in the 9 months ending December '24 (sic) [ '23 ]. During the same period, eSports constituted to 55% in revenue and 38% in EBITDA, while Adtech contributed the rest. Gaming includes Gamified Early Learning, Skill based Real Money Gaming, premium and Telco subsegments. This segment grew by 7% in 9 months FY '24. EBITDA grew by 27% year-on-year in 9 months FY '24 and was down by 3% in Q3 FY '24 compared to Q3 FY '23. The EBITDA margin for this business is at 20.6% in 9 months FY '24 versus 17.3% in 9 months FY '23 and stood at 16.4% in Q3 FY '24. Moving to Gaming. In Kiddopia, the revenues for 9 months stood at INR 168.6 crores compared to INR 162.9 crores in 9 months FY '23. For the quarter gone by, the revenue stood at INR 54.7 crores versus INR 57.1 crores in Q3 FY '23. EBITDA for 9 months grew by 77% to INR 44.4 crores from INR 25.2 crores in 9 month FY '23. EBITDA margin increased substantially to 26.3% from 15.4% in 9 months FY '23. For Q3 FY '24, the EBITDA margin increased to 28.2% compared to 11.7% in Q3 FY '23. Due to an increase in user acquisition costs and lower marketing spend, we experienced a higher churn or rate of subscriber will decline in this quarter. However, due to control on the CPT, we delivered higher EBITDA margin of 28.2% in Q3 FY '24. We made a hard switch between our preferred user acquisition channels in December '23 to improve performance in the coming quarters. ARPU saw an increase of around 3% year-on-year -- quarter-on-quarter in Q3 FY '24. We are working on alternate growth opportunities, for example, IT licensing, which can break through the current user acquisition logjam. Moving to Animal Jam. Animal Jam delivered its highest quarterly revenue and EBITDA numbers since Nazara acquired it. Revenue and EBITDA for the quarter increased to INR 26.8 crores and INR 6 crores, respectively. EBITDA margin for the quarter stood at 22.2%. The growth was driven by a very successful set of in-app events across the quarter, culminating in a "Wishing well" event that was very enthusiastically received by our community of young gamers. In addition to ongoing performance marketing, Animal Jam also started experiencing with other user acquisition methods, including a campaign on TikTok with mini- influencers, coinciding with the holiday season. More broadly, Animal Jam's growth over the year was driven by product development and better UA driven by deeper analytics. The success of Animal Jam gave confidence to us for deploying a similar playbook with other popular global gaming IPs. Moving to World Cricket Championship. Revenue for the WCC franchise stood at INR 18 crores, with EBITDA of INR 4.3 crores in 9 month FY '24. The EBITDA margin for the business stood at 23.7%. As we shared in Q2, Nextwave is reinventing the WCC franchise to position it for growth and help it break out of its current scale. The initial set of actions have been taken over Q2 and Q3, including a revamp of Nextwave's ad monetization, live ops, brand sales and user acquisition operations. Product related changes will continue through Q4. This includes changes to the existing games, WCC2 and WCC3 as well as a new game to be launched in Q1 FY '25. Moving to OpenPlay. This segment's revenue and EBITDA stood at INR 32.9 crores and INR 0.8 crores, respectively, 9 months FY '24 compared to INR 43.6 crores and INR 8.5 crores in 9 month FY '23, respectively. In July 2023, a 28% tax for entry fees for skill based Real Money Gaming was implemented effective from 1st October '23. The impact of increased GST costs has largely been absorbed by all industry players, including Classic Rummy, while player deposits are inclusive of 28% GST paid to the government. The player still gets the full amount via a loyalty promotion bonus, which can be used in the game. Post-GST implementation, Classic Rummy recorded an EBITDA loss in Q3 FY '24. While gross revenue before netting loyalty promotion bonus is steady, that is, player activity has not reduced. However, net revenue is lower due to higher loyalty promotion expense. The added GST costs led to an EBITDA loss in FY '24. With clear GST policy guidance, Nazara will actively seek consolidation opportunities in the sector. Our eSports segment grew by 24% year-on-year in 9 months FY '24 and 27% year-on-year in Q3 FY '24, while EBITDA grew by -- much faster by 44% in 9 month FY '24 and 79% in Q3 FY '24. Moving to Nodwin. The revenue for the quarter increased by 20% to INR 133.9 and grew by 17% year-on-year in 9 months FY '24 to INR 327.9 million. EBITDA was at negative INR 5.8 crores in 9 months FY '24 and negative INR 2.2 crores in Q3 FY '24. These numbers include PublishMe, which was acquired by Nodwin in October '23. The EBITDA loss during Q3 FY '24 is attributed to the gaming accessory business Brandscale Innovation which houses the brand 'Wings'. To support upcoming product launches and expand into new markets, including laptops, Brandscale required substantial injection of fresh capital for marketing and branding efforts. Nodwin has chosen to forego further investment and relinquish control, enabling Brandscale to seek growth capital from new investors. Nodwin shareholding remains unchanged, but Brandscale will be treated as an associate in the consolidated financial reporting from February 3, 2024. Large media rights have been pushed out owing to consolidation in the media, TV and OTT industries. However, Nodwin has been able to secure independent media rights for individual property. Each of these independent media rights were higher than previous years. Revenue per partner has increased from INR 1.63 crores per revenue partner in 9 month FY '23 to INR 2.71 crores per revenue partner in 9 month FY '24. I would also like to highlight the recent acquisitions made by Nodwin, which are propelling the expansion of product offering and market presence. In October '23, Nodwin acquired 100% stake in gaming marketing agency PublishMe for sum of $2 million from its existing shareholder, Nazara and Ozgur. This acquisition will provide the essential tailwinds for Nodwin Gaming to drive its mission of leading the emerging market sports media landscape. In December '23 Nodwin invested INR 33 crores in Freaks 4U Gaming, a marketing services company for gaming and eSports, delivering its services across the world, especially in the PC games in developed market. In January '24, Nodwin Gaming has announced acquisition of 100% stake in Comic Con India through a cash and stock deal valued at INR 55 crores. With this buyout, Nodwin not only looked to diversify its youth portfolio, but to also expand presence in its global entertainment space. Nodwin remains committed to its vision of becoming one of the top 3 eSports companies globally. The growth trajectory will be sustained through both organic expansion and strategic M&A aimed at enhancing capabilities in emerging and developed markets. Sportskeeda continues to have a stellar performance. We have reported a robust year-on-year revenue growth of 57% to INR 1.7 crores in 9 months FY '24 and 68% in Q3 FY '24 to INR 59.8 crores. EBITDA for the business improved to INR 51.8 crores in 9 month FY '23, a growth of 57% year-on-year. So -- whereas for Q3 FY '24 increased INR 26.7 crores, which is a growth of 97% year-on-year. EBITDA margin for the business improved to 35.2% in 9 month FY '24 from 33% in 9 months FY '23. While Sportskeeda continues to grow its revenue and EBITDA. In Q3 FY '24, it's subsidiary profootballnetwork, a business we acquired in March '23, also reported a healthy margin bolstered by the ongoing NFL season. Both Sportskeeda and PFN continue to grow in the U.S. sports media market, where Sportskeeda is ranked #6 in sports domain in the U.S. and PFN is ranked #3 in the American football domain in the U.S. in December '23 as per similar web. Moving to Adtech, our third segment. Over the past year, we have shifted focus from low-margin work to securing high-margin business clients. This strategic pivot resulted in a year-on-year revenue dropped to INR 76.3 crores in 9 month FY '24 from INR 114.2 crores in 9 months FY '23. Despite this, our gross margin percentage saw a significant increase from 19% to 27%, indicating an effectiveness of our strategy. Although our gross margins have improved, Datawrkz EBITDA fell to INR 6.6 crores in 9 months FY '24 from INR 10.8 crores in 9 months FY '23. This decrease reflects our heightened investment in sales and marketing, including team overheads and promotional events. These investments particularly during Q3 FY '24 has significantly enhanced our sales pipeline, leading to improved conversion rate and establishment of crucial partnerships. With this, I will close my remarks here, and I'd like to open the call for Q&A. I request Mr. Sudhir and Rakesh Shah to join me for the Q&A.

Thank you, Anupriya, for that. I am going to actually ask our Chief Operating Officer, Sudhir Kamath and Anupriya to step up to answer the questions today. But I'm also going to jump in where required. So let's get started.

[Operator Instructions] The first question is from the line of Nitin Jain from [ Fairview ] Investment Private Limited.

Yes. Congratulations on the good execution in eSports and Animal Jam. So I wanted to delve a bit on the Kiddopia business. So despite all your efforts, the subscriber growth is -- it's not picking up as expected. So what do you think would be the reason behind that? Like is it the product? Or is it the cohort that we are addressing in terms of their propensity to spend? Or let me put it this way, like are there any learnings from Animal Jam that we could replicate here?

Sudhir, let me take this one. So I think for Kiddopia, right, the challenge is not at all on the product or the consumer behavior or the penetration of the market. I think it's a very simple challenge of being able to acquire users effectively at the cost that we are willing to pay. So I think that is where the challenge we have faced. This year, we have carried a lot with the main ad networks [indiscernible] but I see the Q3 numbers also did not [indiscernible] 2 things we are doing. We are moving -- or we've actually moved as of December into some other ad networks, which we are hopeful will be more effective for us. And the team is working on that. But I think we also need to move beyond linear user acquisition into other ways of acquiring users. One thing we are quite excited about is licensing popular IP. So today, if you see Kiddopia or Animal Jam, both these games are 100% original IP games. But we have seen that many companies in this stage in the kids space globally are doing much better when they are licensing popular IP of well-known characters from companies like Hasbro or Mattel or a Disney. And a lot of these companies we have spoken to, and they are very keen to work with us for the quality of product that is proven. So we are hoping to execute some of opportunities in the coming 1 or 2 quarters. That will allow us to boost user acquisition through organic means and not just through paid UAs. So I think that could be a potential game changer for us, which we are very actively working on. Yes, I hope that answers your question.

Yes. That's good. And just to continue on the Kiddopia a bit. So there was a plan to roll it out to other geographies. So what would be the status of that project?

So we have at this point of time, continued to focus a lot on getting the core business stable. Look, I think the North American market adds capacity for our user base to double. So we need to get that right before we focus elsewhere. We do have experiments running in markets like Japan, we have seen some success. But we really haven't doubled down because we want to solve the core problem.

[Operator Instructions] Next question is from the line of [ Manan Poladia ] from [ MKP ] Securities.

Yes. Am I audible?

Yes, Manan.

First of all, congratulations on posting [indiscernible]. Firstly, my question is also on the Kiddopia a bit. I just wanted to understand this blip that we're seeing in terms of subscriber degrowth, et cetera, and I understand you've made a hard shift from an acquiring platform. Can you give me some color on why the churn has happened? I understand the new user acquisition being an issue, but this churn rate, I'm not really sure so what's the situation there?

Nitish, do you want to take that?

Yes, I'll take it. I'll take it. So what happens is that when our spends are running well, we acquire new users but existing users who have elapsed, also get reactivated. So when you see a churn number, you see a net churn number, which includes activation and reactivation. Because our overall spend in this quarter have gone down significantly, the reactivation also dropped, which is why you were seeing a little higher churn number.

Correct. I understand that. My second question is on the Wings acquisition that we made a while back. And last year, last quarter also, I have spoken to you and I asked you about the purchase of stock in trade line item. And we purchased some, I think, INR 64 crores, INR 65 crores worth of equipment for the Wings platform. So -- and you were supposed to sell it in the festive season, et cetera. Can you give us an update about the performance of how that went?

Yes. No, it has [indiscernible] and our stock had come down. [indiscernible]...

Nitish sir, sorry to interrupt. Your voice is -- we're not able to hear you.

Can you hear me now?

Yes, sir.

Okay. I'll just repeat my answer. So the Diwali was reasonable for us and our inventory levels have come down. But [indiscernible] we took a consolidated [indiscernible]. They have seen a lot of opportunity and initiatives in India. [indiscernible]. And we just felt that [indiscernible] for where the core business is, [indiscernible]...

Nitish sir, we are still not able to hear you.

Nitish, let me just step in on this one. I just want to say that again. I think I'm not sure if you could hear Nitish clearly. Wings, there are 2 things. I think one is your question was around inventory. Inventory levels have come down over the festive season, overall, it went fairly well for them and especially laptop as a category, which they had launched went very well. However, for us, the bigger question would be what is the direction I think the growth for them in this segments which are away from the core eSports [indiscernible] we had ended. So laptops, for example, is not really connected to the eSports business, it's more of a generalist use Connected, Autonomous, Shared, Electric. I think that's probably what you've also seen in an announcement which we put out 2 to 3 days back where Nodwin has decided not to take up this option to take majority [indiscernible] of that business. Does that answer the question?

Yes, I think it does. My last question is with regards to the Sportskeeda and Nodwin numbers. From what I understand that this was a seasonally strong quarter, especially for Nodwin as well as Sportskeeda due to the PFN thing. I just wanted to understand how should we look at numbers going forward? Like is this something that would seasonally we can show or from here do we see [indiscernible] going forward.

No, I think in general, if you look at the last few quarters as well, Sportskeeda has consistently done well in all the quarters, and we expect this very much to continue. That said, there is seasonality in the business. So Q4 might be lower than Q3 but Q4 will definitely be much better than Q4 of the previous year. So growth is definitely there. For Nodwin as well, I think the long-term trend is clearly high growth and continues to be and this quarter would [indiscernible].

[Operator Instructions] Next question is from the line of [ Raj Joshi ] from [indiscernible] Securities.

Sir, I have a couple of questions. Our Adtech business is still facing challenges. How do we look at growing this business?

Thanks for that question, Raj. I think as we have said in the previous con-call as well, we see this business as leading a more fundamental shift away from some of the low-margin business were earlier towards slightly higher margin businesses on the services side as well as the [indiscernible] business. That switch takes time. It's the fundamental reset of the DNA of the company, the organization structure, et cetera. So what you would have seen in the last quarter as well as in this quarter is there's an overall revenue degrowth, but most of the degrowth is on the lower-margin businesses, which we are moving away from. So at the gross contribution level, the percentages will improve that dramatically on a quarter-on-quarter basis, gross margin has gone up from 20% to 31%. That said, post gross margin we then look at the investment that we make into the marketing team and the marketing event. And that has resulted in the -- I mean, that is what we expect to actually drive the growth of this business in the coming quarters. And we think we are on track with that plan. And the team there is executing on the plan that we have.

Okay. And my other question is, how do you look at the organic growth for FY '25?

For the Adtech business or for Nazara business?

For both.

So from the Adtech business side as well [indiscernible]. So I think a lot of the investment which has gone on this year around the marketing team and the events there have started delivering in terms of new client business. And that to us is a breakpoint this time for significant time, this year was not good for Adtech, as you saw. But next year we do expect significant growth on that business. A small mandate also in the product business, that has started delivering good result. It's still early days for that business, but the initial set of clients have started to increase and the stickiness of those clients. So all that has been quite positive or we see that very positively for the coming year. Overall, at Nazara level as well, I think organic growth will be strong across the board is what we see. That said, as Nitish had also said in his opening remark, we are sitting on a lot of capital, which will be deployed towards M&A. So we do expect both organic and inorganic growth in the coming years.

Next question is from the line of Rahul Jain from Dolat Capital.

Hope I am audible.

Yes, Raj -- yes, Rahul.

Yes. Just I have a few questions. Firstly, on Animal Jam since we have seen improving growth out here, what is the right benchmark given where you are at the stage in terms of monetizing it? Can we see 15%, 20% kind of a growth potential here on? Or we still would have to monitor in a non-seasonal quarter to understand what kind of growth it can.

Let me answer that first and then take other question separately. [indiscernible] Animal Jam a lot of the expert in the last year was around fixing the processes and the structure of how they were doing and let's say how they're doing as an acquisition, what [indiscernible] the monetizing players. A lot of those things are in play. And in December, they delivered one of the best ever events in the game, which is called Fishing [indiscernible]. Now all of the basics are now in place. I think they're beginning to see good scale up now in terms of user data as well as monetization. We do expect that, therefore, this you said 10% to 15% growth, I think that kind of growth should be deliverable for all the quarters on a year-on-year basis. But we would like to wait for maybe 1 more quarter to see how it performs in a non-seasonally high quarter as well. And then that give you a bit more confidence on that. But directionally, I think we are there.

Got it. And on the Nodwin business, we have mentioned on this Brandscale side where we basically would -- is it safe to assume that we would see improvement in EBITDA margin starting Q4 since that could not be consolidated? And what will be the stake for us over time as you have also highlighted they may be raising more money in that. Will be retaining our stake or may also see dilution over time?

Let me [indiscernible]. So 1 is I think just in terms of the impact on EBITDA, I think, indefinitely will be possible -- will be positive. As starting from Feb, is when we are doing that has been announced last week. We've not broken out the exact numbers for revenue and EBITDA at this point. So can't share that detail, but it definitely will be a positive impact on profitability for the [indiscernible]. I'm sorry, could you repeat the second question, Rahul?

Yes. Sir, second part was that we have mentioned that the reason we have done this is they have some different plans now or expanded plans and they may need more capital. So which would mean that we may get diluted over time or we would also participate in subsequent rounds out there?

I think those falls, we will take as and when. I think the call we have taken is that we are not retaining the right to -- majority of the -- right to appoint the majority of the directors today. Also that right we have given up. We are -- Nodwin is currently at about 40% of Brandscale. So it becomes an associate for us. We can let it dilute as well, but we could continue to invest as well. So I think options are open depends upon some of the direction the company takes, how much capital it needs, which are the investments [indiscernible].

Got it. And on the Real Money Gaming business, what is the right road map to look at in this business here on? And also any inputs you could share on the potential risk from GST liabilities that we saw at least on the media for some of our peers. So what are the -- what is status for us and potential [indiscernible].

Sure. Rahul, I'll step in. I'll step in here to answer. Is my voice clear.

Yes, I can hear you, Nitish.

Yes. Okay. So I think 2 aspects on the RMG side, one, we are stabilizing our own business, and we've seen some positive traction there between it another quarter to get that done. In terms of M&A, we are talking to a few people and seeing what are the opportunities for us to be in power to potentially consolidate in the market. And third, in terms of GST liabilities. As you know, the industry -- it's been a large industry issue where there have been notices sent for tens of thousands of crores to the RMG companies. We have 2 RMG companies, OpenPlay and Halaplay. We did get summons for both of them and we have supplied relevant information. If there's any further development, we will share with the market at the appropriate time. But of course, it's important to remember that the scale of our business in RMG is much smaller than many of the people who are sitting on very large games. Overall, we think, hopefully, over a period of this year, we are quite hopeful that these retrospective will fall off or the course will take a right view over there, but that's current status.

Got it. Got it. And 1 question on the Telco business, we have seen some increase in losses here. Is it pertaining to some increase in corporate level expenses? Or is it more to do with the initiative towards Nazara Publishing?

Yes. It's not specific to do with the Telco business but some of the expenses are grouped within that. I think it's more one-off expenses that you are seeing showing some losses there.

[Operator Instructions] Next question is from the line of [ Rohit Mehra ] from [ SK ] Securities.

The first question from my side is that the Q3 for Nazara is expected to be better in terms of quarter and number of events as well. And what has led to the lower growth in media and revenue and content views?

So I think the first point is, as everyone know, that [ BGMI is now back ] and the core game [indiscernible] media also to increase the revenue [indiscernible]. However, I think there is a lot of churn, as you know, in the overall media sector as well with [indiscernible] and the potential Sony - sorry Star et cetera [indiscernible]. I think what we see is that there's a little bit of reluctance to look at very large scale across the board [indiscernible]. What Nodwin is therefore focused on this quarter is more individual, smaller deals for property. And those have been happening and those are the in better terms than previous year. But that's a bigger kind of media transaction is not yet happening. We do expect that is due in the next set of 2 quarters [indiscernible].

Okay. Perfect. And my next question is, as we have the good cash in hand, how do you look at the deploying the same and which areas we will be focusing on?

I think we are -- we have a very clearly made out limited strategy, which is look at businesses [indiscernible] clear cash flow and growth both. We are looking at business across all 3 of our segments. So you already would have seen some announcements coming in from Nodwin over the last few days. And on both gaming as well as Adtech, multiple opportunities that our team has been looking at over the last few months. And as Nitish said we do hope to get that to a logical conclusion in the current quarter. But the pipeline is really good at this quarter.

Okay. Okay. And how should we look at the growth in WCC over the longer term because it has been a fairly narrow range. And obviously, the monetization has not been that positive as of now. Can you share some views?

I think on WCC as well, there is a historic business around WCC2 and WCC3 business [indiscernible]. And those have been some value-centric firms. I think the longer-term plan for us is to look at a significant reset of those things as well as new teams that had launched by the studio. And the last quarters and progress this quarter as well more around those product development changes. We do expect next year to be a significant growth year, but I think we've been [indiscernible] to look at that in Q1 or Q2 of next year. But we have -- but we actually have results to talk about [indiscernible].

[Operator Instructions] Next question is from the line of [ Manan Poladia ] from [ MKP ] Securities.

Am I audible?

Yes, Manan.

So my first question is on the Nodwin side. I'm not sure to be used to earlier, but if I could please have the breakup for the content use quarter-by-quarter for this year.

Sorry, I don't have the number offhand, but maybe we could get it to you after the call. We do have it broken out and [indiscernible] quarterly presentation. If you could just look back to those again.

I'll look that up afterwards. And my second question is with regards to -- there is a statement that you put on that slide, on Slide #26, where you said the large media brand deals have been postponed because of the consolidation in TV and OTT. And the revenue also I think 9-month revenue, some INR 50 crores versus INR 68 crores for year-on-year. If you could just explain how we should see that going forward in the next 6 to 9 months with respect to the large deals that you've spoken about?

Yes. So I think in the previous year, there was a larger deal, for example with [indiscernible], which was not specific to 1 event, but also pulled in content from across different esport events and packaged it put it together. So those kinds of deals have not yet started happening again. So probably still looking at more deals, which are individual events and their media right. We expect that to go back to larger deals in the coming quarters. But I mean, we can't say the deal happened in this quarter or that quarter.

Great. Fair enough. I understand that. And as far as IPs go, we are pushing somewhat I understand more IP this year than we did past year, right?

Absolutely, yes.

If I can just add there, right, sequentially, what we have seen is the revenue from a particular IP has been growing. So if you see especially the revenue per partner, which is an indicator for all media rights and bank sponsorship partners, the revenue per partner has steadily increased. So that is a good positive from us.

So since you said that, just 1 small follow-up. I just wanted to understand what sort of traction are we seeing on the sponsor and the media? Is there a little bit more excitement about eSports per se or is there more interest in partnering with you guys to do either IP or to sponsor your IPs?

So we continue to see increased interest and an indication from that, again, like I mentioned about revenue per partner is increasing. So while we don't share an IP-wise trajectory, we have seen a sequential increase.

Right. And just 1 last question. There's been a few competitors that has come up to Nodwin specifically like Sky eSports or somebody else, Villager eSports, et cetera. And they have been taking some smaller IPs from the publisher that is invested in us, which is Crafton, right? And they're still being getting some of the smaller IPs that are published backed. I'm just curious what the industry structure should look like and how we should think about it? Are we going to get most of the bigger IPs and the smaller IPs will keep on going to the smaller players?

Nitish, you want to take it or should I take it?

No, go ahead.

So at Nodwin, our effort is to create IPs across the levels, right? So Grassroot, National and International that give people that opportunity to create heroes and become larger international cards while creating those Grassroot level IPs. And the effort will be on that trajectory. And historically, we've also done that. In terms of the mix of revenue, the white label and other IPs -- white label predominantly IP providers that good margin support, but at the same time, our effort goes on increasing our own IP in that sense, which gives us non-linearity in revenues and EBITDA to come. So the efforts will be on both sides, building the Grassroot level IP is to proliferate eSports in the country and at the same time, grow international IPs as well.

Manan, let me just add in a piece here. I know this [indiscernible]. But like I think there's a bunch of IPs like [indiscernible]. Since many of these are the bigger IP side in this space, and we continue to focus on both products as well as added on new IP. We also saw the announcement around Comic Con India, which is a very well-known kind of property. And I'm sure this -- Nodwin is coming into [indiscernible]. We intended to focus [indiscernible].

And we continue to be the market leader by a disproportionate basis in India and other markets.

[Operator Instructions] Next question is from the line of [ Raj Joshi ] from [indiscernible] Securities.

Sir, I would like to understand what is the scaling opportunity of the recent acquisition done by Nodwin?

So I think each of the properties that you would have seen in the recent past, have a lot of potential. In Nodwin, we have focus there is on taking well-known IPs and then growing them further. So in the last -- if I take a slightly broader view over the last year to start with the Singapore one, which was branded, which actually has started showing growth already. It has been published, which covers the Middle East. There is Comic Con, which happened this year, that speaks for you, which are more Western-based. And also get into PC gaming. Now all of these kind of bring different growth levers for us. They all have strong legacy from many years. They all have strong customer [indiscernible] and I think what Nodwin be able to do is to grow a leverage fees in other markets or, for example, bringing in branding partners or customers who may be present in one geography and not looking for other geographies. And they can actually leverage them with other properties in those geographies as well as capability. So it is a fairly strong growth play that Nodwin is making in, and we continue to do so.

[Operator Instructions] Next question is from the line of Jinesh Joshi.

I have a question on our Classic Rummy business. I think we absorbed the GST impact in this quarter. And hence, our EBITDA was into the negative territory. Now if I remember right, in the last earnings call, we had mentioned that perhaps may be able to achieve a breakeven in 4Q. But my question is, I mean, despite absorbing the GST impact, we have seen the revenues fall by about more than 50%. So If we are planning to achieve a breakeven in the next quarter, do we plan to pass off the GST impact? And in that case, what would be the consequent impact on revenue. And also a related question is that we are seeking consolidation opportunities in this sector, although the policy guidelines are quite clear right now. But given the impact on revenue and profitability, which we are seeing, I mean, what exactly are we looking out in terms of big opportunities in this space is what I want to understand.

Sure. I'm going to take that answer, Sudhir. So 2 things. I think what is very important to understand that the actual business of Classic Rummy hasn't fallen in this quarter while the revenues presented showed a significant drop. And the reason for that is consumers have continued -- because of GST is completely absorbed by us, consumers have continued to play in the way they were playing earlier. And therefore, we haven't seen any significant drop in consumer traction, The amount of money being played with, et cetera, is the same. But the reason the revenues are lower is because we have issued bonus to the consumers to offset the GST cost. And as per the accounting standards, we are now deducting the bonus from the revenues to display net revenues. So I think that's why you're seeing a larger fall in the revenues versus the actual business itself. Hopefully, that will stabilize over a period of time, we can reduce these bonuses that we are issuing as a market also evolves, right? There is competitive thing we need to see what our competitors are doing, et cetera. But we expect that to start normalizing in the quarters to come. In terms of consolidation, so we are looking actively at what are the opportunities. I think 1 thing we need to look at is about these retrospective liabilities that these companies are carrying. And in any consolidation move, how do we ensure that they do not get carried over to our company. So we have lawyers looking at all these aspects. And in the due course, we will take some action if it's appropriate for us.

Sure. My second question is on the media rights business. I understand we have stated that there was some deferment in deal. But can you share which all OTT partners are we currently negotiating with? And what kind of escalation can we see in the next year at least in terms of media rights.

I'll answer that again. I think we don't want to disclose specific partners at this point of time because it is competitive information, and we don't always share it with the competition. But we do see a lot of interest. The team has been building a strong pipeline. And especially on some of our exclusive IP like playground, you will soon see Amazon, for example, did season 1, season 2. We will be making an announcement around that for season 3 very soon where the rights are going to be again, sold at a premium. So I think the trajectory is in the right direction.

Sure, sir. One last clarification required. I think we have mentioned that we will not invest more in Brandscale, but our shareholding will remain unchanged. And we will treat it as an associate, and consolidation will not happen. So the question is, I mean, if the shareholding is unchanged, why is the accounting changing?

So basically, today, we had an option at our discretion to increase the stake to majority, right? And because we took a view that we do not want to invest more, we waived that option so that the company can raise money from external investors. Because we have waived the option to increase our holding in the company, we have lost the rights to consolidate the business as per the Ind AS accounting standards.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Sudhir Kamath for closing comments.

Thanks, everyone, for the questions and especially to Jinesh and his team at Prabhudas Lilladher for hosting this. Just to summarize, I think for the quarter, I think we've laid a very robust platform for future growth. So we are quite optimistic that we'll be able to deliver good results in the coming quarters and we are on course to continue with our profitability growth trajectory. We remain steadfast in our commitment to make Nazara play a very substantial part in India's quest to become a global gaming powerhouse. Thank you everyone. Thanks for the time and look forward to having good interaction in the coming days and the coming quarter. In case of any further queries, please to get in touch with us all with SGA, our Investor Relations platform. Thanks and have a good day.

Thank you. On behalf of Prabhudas Lilladher Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.