OnMobile Global Limited (ONMOBILE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the OnMobile Q3 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle of Christensen IR. Thank you, and over to you sir.

Thank you, Rio. Good evening. Good morning to all participants in the call depending on the geography you're in. Welcome to the Q3 FY '21 Earnings Call of OnMobile Global Limited. Representing the management today, we have FC, the Executive Chairman; Krish Seshadri, the CEO; Sanjay Bhambri, Chief Operating Officer; and Sanjay Baweja, Chief Financial Officer. The call will start with a brief update about the quarter gone by and business update by FC and Krish, which will follow the financial performance review by Sanjay Baweja. Post this, we'll have a short product update presentation by Krish on Zoom video conferencing. The link to Zoom was updated in the call invite mail sent to you along with the financials earnings presentation. I would request all participants to please log on to the Zoom link to view the presentation while audio conference call is in progress. Kindly, do not disconnect audio call while logging on to Zoom. We will then open the floor for Q&A session. I'd like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For a list of such considerations, please refer to the earnings presentation. OnMobile Global undertakes no obligation to publicly revise any forward-looking statement to reflect future likelihood of circumstances. Having said that, I now hand over the floor to FC. FC?

Thank you. Thank you, everyone, for joining. Big quarter in terms of work. As you can see, the results -- financial results are quite good on the cost management and profitability. Quite happy with the team on that side. I want to highlight, since we spoke last quarter, we wanted to show the new gaming platform. I'm quite happy today that we'll have -- we'll spend a bit more time, and hopefully, everybody will be able to connect on Zoom to see the presentation we made for you, just to explain a piece to you what we're building on. And I want to clarify from last quarter also, I saw a bit of a confusion between our product line. So I just want to be clear that in the coming quarter, we had actually 3 products line being pushed by the time we speak next. So the first 1 actually is Challenge Arena. Challenge Arena is a quiz game app. It's an app that works for every operator. We're selling it as a B2B OTT OEM, and that product is ready. We sold it to 1 operator, it's going to go live in this month in India with 1 operator. So that product is ready to go, and that's the product that we're pushing worldwide right now to many operators so that we can capture some sales in the coming quarters. The second product, which I'm not sure we talked about or not mentioned is the Ad-RBT products, mainly in India, to recover the declining Tones market, we're really pushing now with Ad-RBT. It's a product we've been working on many years now. And finally, it's ready to go. So now we should see some revenues coming in, in this coming quarter. And finally, the product that we're all waiting for the ONMO gaming -- cloud gaming platform, which Krish will do the demo. I must apologize, we have planned to do the demo in December or January, now we decided, for many reasons, to wait for this call. We're all very interested to launch the product. Now keep in mind that what we're doing has never been done, so it's really cutting edge. And when I say cutting edge, it's not cutting edge just for us, it's cutting edge globally. It's something that even the big players have not done and really mastered. We did file the patent, as we mentioned last time. So the patent is done. That's why now we'll be able to share with you. The service is really a service for 4G -- strong 4G, 5G, WiFi, which will launch direct-to-consumer and B2B for 5G operators. So different than the Challenge Arena product. So I just want to highlight the difference so that we don't get confused when we talk about Challenge Arena or ONMO, the gaming solution. They're 2 different products. And really, when we say cutting edge, sometimes we think about leading edge. If you don't lead a bit, it's because you're not cutting edge. So it's a bit normal that we're having a bit of delays when we integrated the Appland cloud gaming solution that we have with the Rob0 AI and all the battles that are done by mobile, actually leveraging the Challenge Arena that we've been doing. Obviously, we have some integration issues. When I say issues, they are small issues. They are normal issues. You will see everything that you'll see today that Krish will present is working today. I play an hour a day looking at the games across. So it does work. We just need a bit of adjustments before we do our official beta. So I just want to clarify on these fronts. So the revenue growth is coming from 3 products in the next quarters, and we're going to be pushing. And I wanted to clarify Challenge Arena versus the ONMO, clearly, they are 2 different products. One really cutting edge, we're going to be shooting out to 5G operators. The other 1 is addressed to all the operators, OTTs, OEM devices. So that's the situation. Quite happy. It's a big call today, and we'll have a Q&A session after we've seen the demo. But at least now we can talk about what we're doing and that we can have a real Q&A session. So over to you, Krish, please.

Great. Thank you, FC. Good afternoon, everyone. Warm welcome to you all. Thanks for making the time to be on the call. We are really delighted to share progress in Q3 '21. I'll start by touching upon the business highlights, high level performance of key businesses and the key priorities going forward, followed by a short presentation on both the gaming products that FC mentioned. So Q3 was a good quarter for us on multiple fronts. Revenue was stable Q-on-Q, but if you notice, we registered very healthy margins, both Q-on-Q and year-on-year. So operationally, very, very efficient and good quarter for us. It was also a quarter where there was further digitization of our core B2B and B2C products. So as I mentioned, last quarter, we are digitally transforming the company across several key priorities and products. So let me get into those products right away. So the Tones business, as you saw, the overall revenue grew about 3.2% year-to-date, and that's roughly 2% quarter-on-quarter growth. If you noticed digital revenue actually grew twice as fast as our nondigital revenue. And that was due to growth in digital install base from 16.3 million to 18 million. That's roughly a 10% increase in the digital Tones install base. Not only that, but the strong set per user also increased. It was roughly around 73% now versus 25% for overall which includes nondigital. So the digital efforts really, really are having some effect over here. On the Ad-RBT product, which FC mentioned, last quarter, we said that we were technically ready to start serving ads. And right now it's ready. The product is about targeting mobile consumer with voice ads. We are going through UAT with a few telcos and revenues will definitely start kicking in, in the quarters to come. The second product, which FC mentioned, which is also in the gaming space, but it's Challenges Arena, which is our digital contest quiz product. Our goal has been to focus on this because this is a very exciting segment of the gaming space. And we continue digitizing the products within this space. So Q-on-Q basis, our overall Contest revenue declined, but on a year-to-date basis, it kind of grew to 3.2%. So Q3 was for us, within the contest space to consolidate on digital. The digital contest revenue actually grew Q-on-Q, and that's because our digital active base itself grew from roughly 246,000 to about 256,000 on our contest products. And the monthly active users grew by a very good 28%. Engagement rates, very, very healthy at about 86% average for the quarter. So that's actually a phenomenal engagement rate to have on our digital products. Challenges Arena, in particular, I'll get into the details in the presentation. But very quickly, we completed the play test and the AV testing over the last 3 months. We've signed 1 contract with the telco, and we'll also be taking this internationally. So we are very excited about the contest space within the casual game genre space.. The third one is video and editorial revenue was relatively stable Q-on-Q and year-on-year basis. And year-to-date basis also, we grew about 6%. Coming to the third product, which is the B2C cloud gaming product ONMO. As FC mentioned, yes, we were supposed to show an MVP beta version in December, Jan, but there was a slight delay. It's a complex piece of technology. The thing is we tested the platform in December through an internal play test for streaming and concurrency, and it did really well. We are actually playing games on that platform as we speak. It's just that some of the shorter game moments had a few bugs which we are fixing. So we'll definitely release the beta in April of this year. That said, on that product, there's huge progress on multiple fronts since we last spoke. We signed agreements with over 70-plus games on that platform. Actually, there are -- we signed agreements with game companies, which cumulatively have over 100 games. But for technical compatibility, about 70 of them would probably be on our platform. And right now, we've integrated about 20, 25 and testing it, and it's working brilliantly. So hopefully, by beta, we should have signed close to 100 games. The innovation in our game content, which is moment creation. We created about 600 moment challenges on the platform. And by beta, we hope to have thousands of moments and challenges. So you're going to see lots of interesting moments, which are short clips of the games, and we've been playing them every day and having a lot of fun internally. We've added lot of features on that, which, again, I'll be very happy to show in the product presentation. Some of the features are, on the social side, we've added some battles, voice chat. We completely redesigned the homepage, and you'll see that it's looking pretty much like a fully fledged out product. One thing I needed to add was this is a confluence of technologies between our Appland team in Sweden, the Rob0 team in Canada and the Bangalore product and technology teams, and all these teams have come together to build this product. And we continue investing in these teams and hiring people in all 3 geographies. Quick update on the Q3 financial performance. As I said, it was a good quarter. Revenue was stable at about INR 146 million, but we registered very, very healthy margins. EBITDA, operating profit and PAT grew by 15%, 19% and 49% respectively. And also, cash profit grew by INR 37 million. So besides, we continue to emphasize on employee safety as most of our employees continue to work from home globally. And we also -- employees participated in employee survey in December, and I'm thrilled to say that they affirm that we are a preferred place to work. And this is a testament to our purpose-led culture. I'm really quite excited about the opportunities in both ONMO gaming and the Contest gaming product that lie ahead for us. And I think we are on a very large leg, as FC said, and we are keeping an eye out on executing to the fullest over the next few months. So with that, I hand it over to Sanjay Baweja, our CFO, for his comments on the financial performance for the quarter. Sanjay, over to you.

Yes. Yes. Thank you, Krish. Good evening, ladies and gentlemen, and a very warm welcome to all of you on the call. I would like to wish all of you and your families a very happy, safe and healthy new year. Let me quickly elaborate a little more on the financials. Most of you have already seen the investor deck that has been mailed to you as well as hosted on our website and the exchanges. A few is not on our mailing list. Please feel free to mail to us or connect our Investor Relations teams and we will add on to the distribution list. The quarter 3 financial year '21 was another stable quarter for us. Krish has talked about it. The gross revenue was at INR 146 crores, flat quarter-on-quarter. As per our stated strategy to shut down any business that does not measure up to our stated goals of revenue and profitability, we are continuing to focus on the unprofitable Latin America businesses and are in the process of exiting from countries where we do not have the right pricing power. This effort will be one of the big tailwinds in ensuring our emergence towards the end of this fiscal. As mentioned in my earlier call, I'm reiterating that the same -- the same that we are expecting to complete this process substantially this financial, as far as the operations are concerned, but closure of the entities may slip into the next fiscal. From a product perspective, on quarter-on-quarter basis, Tones grew by 1.7%. Cost -- Contest saw a reduction of about 5.8%, video were flat and games, which is still in its infancy and not in the form that we are about to launch, which Krish is going to talk and demonstrate to you dropped marginally. On the cost front, our manpower cost declined by 4.9% quarter-on-quarter and 11% year-on-year. Marketing costs declined by 16% quarter-on-quarter and 10.9% year-on-year. The decline is mainly coming from the Europe region. Our continuous cost optimization effort led to a cost saving of INR 1.5 crores in this quarter. During the quarter, EBITDA witnessed growth of 15.2% quarter-on-quarter and 60% year-on-year to INR 17.7 crores and a double-digit margin of 12.7%, up from last time, supported by above-mentioned parameters. Our operating profits also grew by 19.4% quarter-on-quarter and 91.8% on year-on-year basis to INR 14.4 crores for the quarter. The major factor driving profitability growth is our cost optimization efforts and lower spends. Our profit after tax was INR 12 crores, a growth of 54% quarter-on-quarter and almost 2x as compared to the last year on a year-to-year basis. For the 9 months of FY '21, our revenue will remain stable. EBITDA has more than doubled and operating profit grew by 209%, and PAT grew by 228% over last year. This demonstrates considerable improvement in profitability, which we are targeting to maintain going forward. During the quarter, our cash balances in the book stood at INR 274 crores, an increase of INR 41 crores as compared to INR 232 crores at the end of quarter 2 FY '21. The rise is primarily due to good collection efficiency. As mentioned by FC, we will continue to invest in our gaming projects, and also by Krish that in the U.S., which is expected to be launched in the coming quarters. A lot of operating metrics are -- and data has been shared in the presentation deck, and I'm sure all of you would have had access to the same. With this, I now will hand over the call back to Krish for the product presentation. Post which, we can -- we will be able to move to the Q&A. Thank you.

Great. Thanks. Thanks, Sanjay. Just to correct myself, revenue was at INR 146 crores. But anyway, I'll just jump straight into our product presentation. It's on the Zoom link, so feel free to log in. So we've got -- the presentation is on 2 different products. The first is our cloud gaming B2C product. And the second one is our Quiz Contest app product, which is more taken to B2B companies, telcos, enterprises, OTT, OEMs. A lot of progress since the last time we met, and we tested streaming, as I said, in our alpha test across several countries and cities. And we also tested concurrency. What you see on the right-hand side is actually our newly designed homepage with a lot of features that we've added, which is sharing control, social features. We've added a lot of battles and challenges and moments. Different formats will be coming soon. As I said, we've signed about -- game agreements that can have about 75 games on the platform so far. Our goal is to get about 100 by the time we get into beta. We've also built moments creation team that can build very unique, curated moments or challenges. Right now, we've got about 600, but that will scale to several thousand by the time we get into beta. So there's going to be a lot of fun games and moments that our consumers will be able to play. And we've also been adding employees across the 3 regions. Moving on to the next slide. This is to give you just a glimpse of the last 3 months. As you can see, the very first visual on the left-hand side is about live play. So right now, we can actually watch someone else playing live and we can play live with that person. This is completely cloud streamed. Again, in October, November, we started working on some of those social features. Not all of them are completely built out, but what you see there actually works. You can share controls. You can go incognito. You'll have a list of watchers who are watching your game. There's voice chat right at the bottom. In December, Jan, I said we've integrated games. So those are all the game challenges that you can play. Each game moment is probably a few minutes, maybe 2 to 3 minutes. These are not full-length games, rightsized content, which is where the market is going, and there is an audience for consuming small snippets of games on the go. I'll elaborate more on this. So that's what we integrated in December, Jan, and there are a few bugs over there, which we are solving right now. And in January, we've also added battles and leader boards, which make it fun and interesting for you to play battles with friends. And these trends can be added onto your platform either through a Facebook Connect or a Gmail ID. The next slide is basically on key gaming trends that are evolving rapidly and leading to a huge opportunity globally. And to a large extent, our product is built on this thesis. So mobile is fueling the growth of the gaming industry, and it's over $100 million today. It's probably the fastest-growing segment within the gaming industry, much larger than PC and console games. Cloud gaming, it's a relatively young market right now, but we are at that cusp, at that cutting edge. As FC mentioned, there are very few cloud gaming platforms and companies at scale today. So we are kind of going to ride along that trend. But our feeling is it will eventually disrupt the games business just like mobile gaming disrupted. On the social gaming side, gamers are likely to stay in-game or even longer, when there's a sense of community, social connections and ability to play with friends. And whenever engagement is very high, it's usually because you've got friends on that platform. So gamers are 2x more likely to actually stay in games if they see some of these connections. And on the eSports side, that's the new monetization model. Gamers are more likely to pay so that you can beat your friends, challenge your friends. And over 40% of the eSports audience actually don't necessarily play the games, but they may follow, they may watch, they may spectate and they participate in that process. So these are the key disruptive trends on which we are kind of building our platform. And the cloud gaming tech is completely built by Appland in Sweden, which we acquired and we've integrated it. We've been testing and optimizing it. Game moments is where there's been a lot of innovation. It's a different way of playing games. The platform will host the short little curated games. And once again, the core technology from the Montreal team, Rob0's team, the core capability of that technology and the content management tool that they've built is what we are leveraging and integrating into these two -- into this platform. So as you can see, 1 and 2 are 2 very, very cutting-edge technologies that are actually coming together. And that's fundamentally what we are right now working on to make it even more seamless. On the sharing moments, I've already touched a little bit about it. I'll show you some of the screens out there, and same thing on the eSports side. So all these screenshots that you're seeing are fundamentally what we play every day. So these are the games that are live and those are people playing games within the company. So the #1 feature is you play instantly. There are no downloads. And games can be instantly streamed into your mobile phone without any need for downloading from the PlayStore or downloading any APK. This is working as of now, and this is a core piece of our technology. There's no frustrating installation process, no device dependency. You can use Android, you can use iOS. And I'm really, really excited to say that we are probably 1 of the first truly mobile gaming solutions. When I say mobile cloud gaming solutions, there are other cloud gaming solutions that stream large screen games to mobile phones, but very few of them stream it directly onto your mobile phone. And our product is built for truly mobile. So games are designed to be played on mobile, not on consoles with controllers, et cetera. So no extra devices like controllers are needed to play ONMO. And that's the case to use any other cloud gaming solution on mobile, today you might need to you controllers. I think just getting onto some of the other features of the platform, which is Discover. It's a very personalized experience. You can watch friends play live, you can discover games and other popular moments and battles. You can track your friends who are playing these games and all their activities so that you can then do a challenge or a battle with them. So all those things are integrated across what you see on the bottom navigation bar. So as I said, we're developing thousands of these short curated game moments. It's an innovation and curated game moment development and we're in the process of filing a patent in that area. And ONMO curates these in a very, very different, snackable format. It's a very controlled environment where -- plays therefore more heightened game of interest and engagement. And some of these ONMO generated challenges within the moment are there to ensure that there's replay value for gamers. And especially gamers like going back and playing the same level, the same moment. There are always some cool parts of a game that you actually want to go back and play. And in most cases, you can't because we'll have to go back to the beginning and do that, or you'll have to go back to a certain level and progress through a level and then go to a certain part. So we avoid that for people because we kind of curate the best moments of a game, the coolest moments of a game. And what are some of those. The back-end technology of this has an algorithm which will look at various areas and parameters along which we will curate a game or define a moment. It could be based on a specific game level, which is the most common one, but you'll see that pretty much on most platforms. But in our case, you'll be able to play games based on a certain number of moves, or number of coins to collect or time-based trials, et cetera. So that's why we have this ability to build thousands as opposed to just 5 or 6 unique challenges per game. I think we -- I touched on this already on the game moments. And, yes, as I said, we'll have thousands -- right now, we have the ability to create about 1,000 moments a month. So hopefully, by our beta, we should easily cross over 1,000 moments and 100 games. On the social and co-play side, again, some very, very cool features out here that you can see. These are 2 screens of a player and a watcher. So this is where our cloud streaming technology comes into the picture. You can actually see and share controls with another player. And you're not -- this is not available or possible in all other competing platforms that you see. So playing games together online is what current millennials love. And key innovations that enable players to play with each other, watch others play, I think, share your screen, the entire communication suite, all these things are there but it's not there in one place. It's disaggregated across several different players out in the market. So this is something we are able to do because of our core streaming technology. And in a way, when I use the word seamless, it's a key word for screen sharing and communication because all this is without needing multiple applications, right? You don't need a game, you don't need something else for spectating, go to Discord, go to Twitch and then go to a communication suite. We are trying to build all this together in 1 place. Battle and compete. Once again, we've just built our virtual currency battles, which will allow you to pick a moment, challenge your friend, and you'll be able to play your session and post it, will appear on the leaderboard, et cetera. So as we go through the next few months, we'll start building different types of battles, one-on-one battles, multiuser battles, [indiscernible] battles, which are time-bound challenges, with cash, without cash, et cetera. You might be playing battles which are synchronous, real time, some of them may be asynchronous. So there's a lot of innovation and product rollouts that will happen in that space. But as of now, we've got 1 battle format out there and by -- when we launch, we'll definitely have 2 or 3 battle formats. I think there were some questions on competitors. I think I mentioned before, there are people in that competitive landscape and everyone does a little bit of what the others do. I don't have too much time to get into the details. But broadly speaking, we selected a bunch of different players out in the market. Just to give you a feel for where we are different. That doesn't mean these are not good products. I think everyone has a place in the market, but we are also very different from what some of these companies do. For example, you've got Google Stadia, Blacknut, xCloud, their streaming technology is -- that's where our similarity starts and ends, but it's more focused on delivering PC console games, for example Xbox One, you can kind of book that up on your mobile, and it will take some time to boot up on your mobile. But in our case, we are directly streamed on mobile. So there's no console, there is no controllers, et cetera. Facebook, for those who have been following, also have launched Facebook Gaming. It's a very compelling product. It's very good. But once again, we are very different. They're monetizing from ads, which is what Facebook does. They're not into battles and challenges and having those interesting, curated game moments. Twitch, many of you might have been on Twitch. It's one-to-many spectating. It works really well for that consumer experience, but our consumer experience is completely different. It's more about seamless multiparty co-play, voice chat, battles and not necessarily just 1 to kind of a thousand spectating kind of an experience. Skillz, MPL, PayTm First Games, WinZo, these are all more or less apps in the same space, except for Skillz, which doesn't -- it's not Indian, but the others, as you know, and have been following are. You need to download these games, at least their APKs. Not necessarily the kind of co-play and sharing that we have. Ours is completely stream based, there's no download. There are limited number of challenges out there per game. If you go to some of their games, there might be 10 or 15 challenges. But as I said, in our games, we are chopping everything down to rightsized curated moments, so we'll end up having thousands of game moment, challenges on our platform. Bunch is a very interesting app. But once again, for a very different use case from what we are building. It's a place where you can go and literally take a small bunch of friends and play games. Most of the games are actually integrated onto that platform, so it's a little limited in the catalog. And in our case, our catalog is going to be much, much bigger than Bunch. So that's just a little flavor for what the competitive landscape would look like. The high level go-to-market plan. As I said, we'll be launching B2C first. We completed our alpha internal launch in December. We'll have our MVP of our data in April. We'll start monetization by Q2. And we'll also be ready for a B2B telco version starting the same quarter. Monetization model is primarily eSports, and we are also going to start testing out subscriptions. The target audience, it's primarily 18 to about 35 or so casual gamers on 4G, 5G, WiFi. And that set of the casual gaming market, which was, to a large extent, ignored is actually now revised. They were called noncore gamers, but noncore gamers today are forming at least 45%, 50% of your gaming audience. So, yes, we are basically targeting that audience across India, U.S., Canada and a few countries in Europe. I'll just move on now to the next product. As FC mentioned, this is a B2B product. It's not a cloud streaming product, but it's an app. We internally called it Challenges Arena. And firstly, Contests is another subsegment within the casual genre of gaming. It has very different characteristics from others. The customer acquisition cost is usually a little lower. And now people have started experimenting with battles over here. As you can see, it's a Contests app on Android and iOS where you can challenge friends on various quizzes and games. And we've already got thousands of quiz questions in different formats, text, picture, audio, video. And you can play quiz challenges and get ranked or you can battle with opponents and get ranked. And we've got a personalization engine which throw a certain category to you based on your taste graph, whatever you indicated while signing up. We've -- just to give you a sense, this is what it looks like. This is a complete product right now. We've been using it for about 2 to 3 months internally. And just to give you an example on the right side, it's a quiz question about Hollywood movies. And you can go there, you can play that, the payment gateway and then the challenge loads. And you play with someone or without someone in this case, you get ranked and you appear on the leaderboard. Or if you want to do the same thing and battle against an opponent, let's say you choose a category of questions, which is cars and bikes, and then it shows you the list of battles. And then you say you want to play against someone, the opponent search starts and it looks for someone and finally find someone who's also looking to play the game, and then you battle with that opponent. In this case, it's a question about a very famous bike brand. And either you win or you lose, the game gets over. And the 2 people, their scores are -- and the result is shown and you appear in the leader bond. So it's a slightly different product from the previous product that we showed. And the go-to-market plan, as FC mentioned, we are launching with 1 telco in February, this month, and launching with telcos internationally starting next quarter. And not just telcos, but there's also interest from other digital companies, OTT partnerships, OEMs for distribution. And our core focus over the next quarter or 2 is going to be on internationalization and bringing in local content, and that's part of our robust product growth map over here. So right now, I'll just have a very short video on our first product, which is ONMO, our cloud gaming product, post which we'll throw it open for Q&A. [Presentation]

Over to the moderator now.

Krish, thanks for that. We can now take Q&A, please.

[Operator Instructions] The first question is from the line of Prakash Ramaseshan from Pragya Consulting [indiscernible]

We're able to understand the products that you explained to us, but we're not getting a sense of how large the financial opportunity is. So if you could explain that to us, please?

Krish, go ahead.

Okay. I'll go ahead. So on the B2C cloud gaming side, this market is a huge billion-dollar market across the globe. So most of these cloud gaming companies have just started. And if you look at comparables in the market, many of them in the Esports and battles and challenges, a good solid company is probably in the hundreds of millions of dollars. So the overall opportunity today is probably the $3 billion to $4 billion range, but that will grow over the next 4 to 5 years. So we see this as a very big opportunity. I'm not going to give any guidance and numbers right now, but it's a huge opportunity for a lot of people to be out there. The mobile gaming itself is $100 billion, and this cloud and Esports side will probably -- the entire market will probably be a $10 billion market. These are just market estimates. So that's the overall opportunity size.

No, no. I'm not looking to hold management to any numbers. That's not the intention here. I was just trying to understand as an investor, this opportunity would be as large as the existing business of the company. Would that be fair to say?

Over time, the estimate is, obviously, they should get much bigger than the current business. But that means many, many years and not necessarily immediately. But obviously, since the market size itself is so large, our expectation is that it could be much bigger than what we are doing today.

[Operator Instructions] The next question is from the line of [ Jeevan ], who's an individual investor.

This is [ Jeevan ]. Just 1 question. What's the company vision for next 3 to 5 years? Will it be top in content, gaming or Tones or all of us in focus or any other area that you guys thinking that will be join and -- for next 3 to 5 years or maybe more? Or the -- this is just -- we just want to know. And that will -- I'm not asking for any financial one that will be your target, but focus area, mainly.

So let me take that. So I think the legacy business will continue to be as is -- our target is to get more profitable. New businesses, Krish has just mentioned, these are large opportunities. Our focus is moving towards that. We believe that our growth will -- actually, for revenue growth will come from these new products that we are going to launch over the next few quarters. And that's where our big focus is going to be over the next 3 to 5 years and beyond.

[Operator Instructions] The next question is from the line of [ Yash Chowdary from Param Capital ].

Am I audible?

Yes, sir.

Yes. We can hear you.

Congratulation on good set of operational margins that you have achieved. With regards to the new products that you guys are launching, I wanted to know that this ONMO thing. How is it going to be? Like we can download it directly from your website or how exactly?

Yes. So as we showed in our product, the ONMO product is a PWA. You don't need to go any -- into any app store. So you can just go into your mobile phone, open a browser and go straight to any -- our onmo.com link when it is ready, and you should be instantly able to play. So there is no -- nothing to download from any play store. That's why it's so simple. It's meant to be just easy on any phone.

Okay. So since this is browser based, there would be -- I suppose that there is no issue with regards to user traffic or like how many users can this particular platform handle?

Yes. That is -- I mean, that's back-end core technology. That is something which we shouldn't have a problem with.

Okay. So this ONMO is a separate product, which you guys have launched, which is in the process of being launched. And this Challenge Arena is another product for which you guys have partnered with a telecom company, right?

Yes. As FC mentioned, within the gaming space, there are 2 products. The ONMO is a cloud streaming product, which is, as of now, going to be B2C. As we said, we will do a beta of that in April. The other 1 is Challenges Arena, which is a B2B quiz gaming app. And that, as you said rightly, will be launched with a telco's starting this month.

So this quiz gaming app, which you guys would be partnering with the telecom company. So how exactly would the scheme of arrangement be?

Sure. I'll have Sanjay Bhambri, our COO, answer that.

So fundamentally, it's going to be on the same -- similar model and the business model, the way we work today on with the telcos, which is basically on a revenue share. We would launch this service under the telco brand with our services under Challenges Arena. And there will be a revenue share. We will do the product. We'll do the fulfillment of the quizzes and distribution of the rewards, and we will get x percentage of the revenue of what the consumer pays.

Okay. So similar to what the Tones business and the content business is right now going with, right?

Exactly.

Okay. And like, so there won't be any specific area of operation for both the products, if I'm not wrong?

Sorry. Can you -- I didn't understand the question.

Will there be any specific area or geography that you guys will be competing?

So I think the intent is, at the moment, the definition is more from the market aware -- Challenges Arena is more focused on upgrading the quiz from a legacy to digital format. And it continues to be a more -- at the moment targeted at the telcos. Whereas ONMO is going to be more focused on direct-to-consumer services because you need the large masses across the globe to do. As far as specific geographies we're going to launch ONMO, I think, over the next calls, I think FC and Krish will come back and give that as we go closer to the launch. As well as on the CA is concerned, our existing spread across all the continents with our customers, existing customers and new customers remains the target. So it's basically global.

The next question is from the line of Milind Karmarkar from Dalal & Broacha.

A couple of questions. One was that -- of course, it was expression or my thought process that over a period of time, you probably will develop a platform similar to Unity Technologies, which helps other gaming companies to come and build games or people who actual build games come into that, so come on to that platform. So just wanted to understand. Is that in our plan of thing? That was my first question. The second question was that if I look at the normal gaming platforms, the place -- there are many, many players in this space. So I wanted to know how we would be different than most of the others, or what would be our USP? So these were my 2 questions.

Sure. I'll take that. I think first question on Unity. I mean, Unity is slightly different from what we are doing. They're not in that space, where that provides core technology for game development. We are not building games over here. So this is a platform that hosts a set of curated game moments. So we are not building the games per se, but we are working with game developers who will host their games on our platform. Your second question was on differentiation. I think I touched on a little bit in that slide. Maybe I'll just add a little more color to that. So the first thing was on cloud streaming. Now, of course, there are others also who cloud stream. But as I said, if you go to Stadia or a Blacknut or an xCloud, the streaming technology there is focused on delivering streaming primarily for, let's say, your Xbox 1 or your PC or your console games, and then you have to move that on to your mobile. But in our case, as someone previously asked, what do you do? We just have to go straight into our mobile browser and load the games up. So it's very different. It's only for mobile. There are no controllers. There are no hardware to be bought and any of those things. So it's a very different experience. If you compare it to other companies like, let's take the Indian ones like MPL or Paytm First Games, et cetera, I think the only place where we are similar is in terms of battles and challenges that they have. But when it comes to other features, they're not cloud streamed. You need to go to the MPL website to kind of download the app, the APK. And then the number of game challenges that you have there is limited to maybe 6 or 7 game challenges per game. While over here, we are creating and curating and building out game challenges. So you could end up having about -- you could take a game like, let's say, Cut the Rope or Roll the Ball, and we could chop that into maybe 300, 400 very, very interesting unique moments. So we are not hosting complete games on the platform like some of the other competitors, but we are curating very, very interesting pieces of a game, which people like playing and they go back to playing those games. So that's just 2 key differentiators. And there are a few more, which I had already explained in the call. Hope that helps.

Okay. My second question was that, yes, in India, it is true that we don't have a lot of, let's say, competitors. But how -- because in your presentation, I saw that you would probably be with a telco outside India as well. And the names, which you've suggested are all countries where -- which are -- which have got well-developed gaming companies and the games are already there on mobile as well. So how confident are you of tying up with a telco outside India? And again, as I said, what would be your USP there or it would be the same USP?

Okay. This is Sanjay here. So as I think I was speaking earlier, fundamentally, from the telco standpoint, at the moment, the key focus is on the Challenges Arena. And 1 of the key things we have is that we are already working with a lot of telcos across different parts of the world with legacy part of the service. One straight-line is to upgrade the non-digital service towards the digital service, which is the Challenges Arena, point #1. Point #2 is one of -- few of the USPS, which we carry, is the consumer life cycle management, which we do. So contrary to anyone else which is sitting outside versus we sitting inside an existing operator or most of the operator which we work with, we anyway do the life cycle management of the consumer for many, many services. So our edge over being able to give a better service and experience because of understanding that consumer, we get a little bit of edge. Over and above the bells and whistles on the platform, which I'm not getting into, which basically -- obviously, we need to differentiate on the platform, which is there, I think these are the few key elements, which help us and make us a little more confident that the telcos will resonate more with the Challenges Arena because of this. Hope that helps.

And 1 last question from my side. When do you think that the gaming revenues will start reflecting in your overall top line?

If you're talking about the new gaming revenues, as I said...

Yes, new gaming.

Yes. So Challenges Arena, we'll launch very soon. So you should see some revenue growth starting next quarter. And with ONMO it's -- as I said, the quarter after is when we will do the consumer launch. So it will just be after that.

[Operator Instructions] The next question is from the line of [ Dipesh ] from Emkay Global.

Just want to understand what role we exactly play. Let's say, in online gaming market if one understand, it is a $150 billion plus kind of market globally. Now what role we play in overall ecosystem? What kind of value addition we do? If you can help us understand from that context? Earlier, you highlighted differences in versus, let's say, MPL in India or Unity globally. So what limitation our business model brings in terms of revenue monetization or what overall pie we can address, if you can provide some better perspective because I'm yet not clear on that part? Second question about, let's say, our focus on game and content going forward. Now whether it would be still B2B where we use telco to drive monetization for us, or it would be B2C also? And how margin profile difference would be, let's say, across 4, 5 business, which we generally highlight? Whether there would be any material margin difference at gross level across the business?

Okay. I think there were quite a few questions on this. Maybe I'll have Sanjay address the question on Challenges Arena, and then I'll talk about a little on the margin of ONMO.

No, I think the first question was, basically, are we going to just remain on the telco or go on to a B2C. So sir, as some of us, including FC, Sanjay Baweja, Krish and me, we were all talking about, at the moment, the focus is with the Challenges Arena, which is the trivia and the quiz app. That is, at the moment, more focused on the telco, which is a regular way of doing business. The ONMO, which is the streaming new gaming platform, which is -- which we'll be rolling out soon, that is more at the moment focused on a B2C model. As we evolve, obviously, they will have variants of it. But at the moment, if I can put the answer, that is basically where our focus is. So just to be clear, we will have both the models, B2B for -- or the telco model for Challenges Arena and ONMO the streaming services for the B2C. That was first.

Yes. I think also, ONMO B2B partnerships with telco will happen after the B2C launch, as we indicated in our product presentation. And on the margins in this business and the monetization model, on the ONMO side, the monetization model is predominantly Esports, which is battles and challenges. If you've kind of played any of these games in the Esports space, you'll understand how that money is made. When -- there's a certain take rate that the platform gets based on the money that's used to play a battle. And the margins typically in that business -- and I'm just talking at a macro industry level -- is at steady state, when these companies are scaled up, the margins roughly will be between 22% to 27% or so operating margins.

I think the first question remained unanswered. It is about -- more about overall market. What role we play in overall ecosystem as well as value addition side? And you said about differences and all. Where we differ? What -- let's say, where we are different, what limitation it brings?