Soon after the news of MPL laying off close to 350 employees broke out, the All India Gaming Federation (AIGF), issued a statement regarding the recent trends.
The AIGF spokesperson said, “The recent decision by the GST Council to impose valuation for online gaming on deposits instead of platform fee comes at a time when the world was looking at the meteoric rise of online gaming in India that would build IP and technology as the next line of esports, and over 2 billion USD of investment was attracted by the sector in the last few years.
However, with over 400% increase in GST liability, a vast majority of entrepreneurs who had innovated in the sector would be disproportionately impacted with many of MSMEs and startups going out of business. Since the decision multiple companies have announced their closure or wide spread layoffs and we believe this trend will only increase in the coming months.
Unfortunately, the decision will result in an emergence of an oligopolistic market. Only a few established and well entrenched companies will be able to scrape through this change by using their existing capital reserves, though, even their revenues and valuations will significantly fall.
However, as oldest and the largest industry body representing the largest number of MSMEs, we will continue to work with the Hon’ble Members of the GST Council and the Union Ministry of Finance over the next six months to advocate for a stable and progressive regime that puts the Indian online gaming sector back on the path of global leadership and contributes to the vision of India becoming a global gaming power house.”
Amarylisa Gonsalves is a Content Writer at Gutshot Magazine. Advancing from a marketing background, she found her calling in writing. She takes delight in exploring genres and is a curious learner. Patient and ambivert, she believes in letting her work speak for itself. Apart from content writing, she finds solace in writing poetry by expressing herself through words. Additionally, she adores indulging in anything that satisfies her creative self, like drawing and DIY crafts.
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