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Vi Gaming: Vodafone Idea Bets on Mobile Gaming To Help It Out of Financial Slump

Vi needs money, and it's hoping that a subscription based gaming service will give it a regular influx of just that.

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Vi Gaming: Vodafone Idea Bets on Mobile Gaming To Help It Out of Financial Slump
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Telecom provider Vi, or Vodafone Idea, announced on Monday that it was partnering up with gaming company Nazara Technologies to launch Vi Games on the Vi app.

The service will offer "gaming enthusiasts" more than 1200+ Android and HTML5 based mobile games across different genres.

"Through this deep-integrated association, Vi customers will get access to a wide range of gaming content including popular game titles from various franchises in India on its gaming platform – Vi Games," the company said.

This comes at a time when Vi is struggling with massive debt and a diminishing customer base. The company in January accepted a rescue deal to convert a part of its dues into equity for the Indian government, which now owns 35.8 percent of Vi.

Vi needs money, and it's hoping that a subscription based gaming service will give it a regular influx of just that. Here's how:

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The Plan

The new games section will be accessible through the default Vi application that gets installed with the SIM card, according to the press release.

Vi Games will have content divided into 3 categories:

  • Gold Games: Vi users can access these games through a Gold Pass offering 30 games for just Rs 50 for postpaid and Rs 56 for prepaid, with a validity of 30 days. Post-paid users with Rs 499 and above plans will be offered 5 free gold games a month.

  • Platinum Games: These will be available on a pay per download basis through a Platinum Pass priced at Rs 25 for postpaid and Rs 26 for prepaid.

  • Free Games: The service will also host about 250 free games on the platform for all Vi customers.

Vi said it plans to gradually expand its gaming offerings from casual mobile games to social gaming and even eSports in the future.

"We see gaming as a major focus area of our digital content strategy and we intend to build a comprehensive play encompassing most facets of gaming with the aim of establishing Vi as a preferred destination for both, casual as well as serious gamers," said Avneesh Khosla, Chief Marketing
Officer at Vodafone Idea.

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Vi's Financial Troubles

Vi has been struggling with enormous debt of around 2 lakh crore, most of which it owes the Indian Government. It is also plagued by growing losses.

In January it reported that its consolidated loss had widened to to Rs 7,230.9 crore for the third quarter of financial year 2021-22. A year ago it had posted a loss of Rs 4,532.1 crore for the same period.

Even consolidated revenue from operations declined by 10.8 percent to Rs 9,717.3 crore from the same quarter last year.

Due to industry wide price hikes last year, the company's subscriber base declined to 24.72 crore from 26.98 crore in the same quarter last year – a loss of nearly 2 crore subscribers.

When Jio entered the space in 2016 with low tariffs and cheap internet plans, it shook Indian telecom. Reliance's deep pockets let Jio lower its prices to unsustainable levels and other telecom providers, including Vi, were forced to do the same in fears of losing their subscribers to Jio.

India currently has some of the lowest telecom rates in the world.

In 2019 the Supreme Court told Vodafone and Airtel to pay the government close to Rs 20,000 crores each in Adjusted Gross Revenue (AGR) dues, adding to the debt burden.

Last year, Kumar Mangalam Birla the former chairman of Vodafone Idea stepped down from the board and offered sell his Aditya Birla Group's 27 percent stake in the telecoms carrier to keep it afloat.

Both Birla and Vodafone Plc, which owns 45 percent of Vi, were contemplating giving away their stakes to lenders or the government for free, sources told Business Standard.

The government doesn't want Vi to shut shop and abandon its 24.72 crore subscribers, so it offered the company some more time to pay back dues and convert a part of its dues into equity.

Vi took this deal in January and gave the government 35.8 percent ownership.

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How Gaming Could Help Turn Things Around

India is the fastest growing gaming market in Asia.

Gaming here is growing faster than social media and is estimated to cross 500 million users within 2022 in India, a FICCI-EY report suggests. By 2025 it is expected to be be a 5 billion dollar industry by revenue.

Most of this growth is coming through mobile phones. According to TRAI estimates, India has the world’s second-largest internet population at around 800 million users, most of whom access the internet via mobile phones.

The average user in India spends an average of over four hours a day on gaming, according to a Deloitte-CII report.

Vi plans to ride this wave and monetise its subscriber base of 24.72 crore. If a large chunk of its users agree to pay between 25 and 50 rupees a month, it will have a reliable stream of revenue to count on.

“We are seeing a significant uptake of gaming consumption in India with more than 95 percent of gaming enthusiasts using the mobile device to enjoy a wide variety of content. Deeper penetration of smartphones and 4G availability has led to meteoric growth and adoption of gaming content making it a popular choice for fun and entertainment," said Khosla.

Vi isn't the only telecom company trying to leverage mobile gaming.

Last year, Jio announced a gaming tie-up with Japan's Sega to bring the popular Sonic the Hedgehog 2 and Streets of Rage 3 to its network. The games will be available on Android devices, set-top boxes, and JioFiber.

Airtel, meanwhile, seems to be focusing on facilitating cloud gaming through 5G and esports tie-ups.

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Gaming as a Subscription Service

Like with the music industry and the Over-the-top (OTT) media industry, subscription services have become a permanent and growing fixture of the gaming industry.

Xbox Game Pass, for instance, is considered the 'Netflix of games.' It is a subscription service where, for a monthly fee, you have access to a large library of games to play, as opposed to buying individual copies. This service is rapidly gaining popularity and already has over 25 million subscribers.

Many publishers already have subscription services and Sony is reportedly working on a service to rival Game Pass, which it will merge with PlayStation Plus and PlayStation Now.

According to Juniper Research, revenue from gaming subscription platforms is expected to reach $11 billion in 2025, up from $ 6.6 billion in 2020. Much of this growth will come from mobile game subscription services.

Apple has launched Arcade, a subscription service which offers a selection of around 150 games. Google has introduced Play Pass for Android, which gives access to over 600 games and apps. Both these services come at a $5 monthly cost and a one-month free trial.

For avid gamers, a subscription service is a good way to play a variety of games at a relatively low cost. For companies, it is a good way to ensure a stream of constant and ever increasing revenue.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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Topics:  Airtel   Jio   mobile games 

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