Bootstrapped and profitable with annual sales of more than $40 million is not common in the Indian startup ecosystem, but Gameberry Labs, headquartered in Bengaluru, has managed this in five years.
And the founders say this is “just the beginning”.
The startup, founded in 2017 by Afsar Ahmad and Govind Agarwal, develops board games. The two flagship products are Ludo Star and Parchisi, both of which fall under the casual mobile video game category.
Gameberry Labs has managed to make great strides in international markets such as Saudi Arabia, the US, Spain and the Latin America region, with five million daily active users (DAUs) and more than 20 million monthly active users (MAU).
This has resulted in Gameberry Labs achieving cumulative sales of over $100 million. Current annual recurring revenue (ARR) is about $40 million, and the startup says it’s a profitable entity with EBITDA margins of about 50 percent.
Afsar says the team first introduced their board games to India and was surprised to find them popular in Saudi Arabia, Pakistan and later Spain and other Spanish-speaking countries.
Gameberry Labs says it has about 100,000 daily active users in India and the country potentially remains a core market for the startup.
Gameberry Labs’ board games fall into the social or casual gaming category and Parchisi, similar to Ludo, is popular in the Hispanic regions.
Afsar says: “A game like Ludo falls into the niche space where people have enough time to play and also interact with other people. This appeals to the masses because it solves the core need of socializing.”
According to a report by SkyQuest Technology Consulting, the global board game market was valued at $13.75 billion in 2021 and is expected to reach $30.93 billion by 2028.
Traction and growth
Since Gameberry Labs introduced its first game in 2017, it has started to build steady traction in the market, especially in Saudi Arabia, where Ludo Star saw over two million downloads. Parchisi saw a similar trend. About 98% of the user base is from outside India.
“These markets didn’t have the right product that would be of interest to them,” says Afsar.
The COVID-19 pandemic and lockdowns around the world forced people to stay indoors, forcing them to look for new ways to socialize.
Gameberry Labs revenue, which was $7.5 million in 2019, skyrocketed to $34.9 million in 2020 — an increase of more than 350%.
In the month of April 2020, the startup saw its highest DAUs at 14.6 million.
Lokesh Suji, Director of the Esports Federation of India and President of the Asian Esports Federation, said: “As with Esports, the mobile casual gaming market in India has been at the forefront since the lockdown during COVID-19. The pandemic boosted interest in video games among the general public and made it a mainstream source of entertainment for them. People found a way to virtually connect with their friends and others around the world through these video games and that’s how they got addicted. This ultimately led to India dominating the mobile video game segment globally and becoming the largest market for mobile video game downloads.”
Though things started to cool down by 2021 as countries began to ease lockdowns, Gameberry continued to see traction.
Pradeep Gupta, founding team member of Gameberry Labs, says there has been no major drop in user numbers or revenue. While this startup saw a decline in its user base, it had a modest increase in revenue growth in 2021.
As Lokesh says, “Casual video games are generating more revenue than ever before and have also attracted a lot of investment from brands, with publishers adopting different revenue and revenue models that have proven sustainable.”
According to Gameberry Labs, about 70% of its revenue comes from in-app purchases and the rest from advertising. The startup attributes its profitability to the low cost of consumer acquisitions and says its popularity is largely due to word of mouth.
Gameberry Labs has 110 employees and the average revenue per employee is $400,000.
“We focus on the quality of the games and build experiences that people want to share with each other,” Pradeep says.
Market potential
The SkyQuest Technology report notes that board games, which have always been a popular form of entertainment, have seen a surge in interest, largely thanks to the internet.
“Another factor that has been influenced by the Internet has been the growth of digital downloads. Many people nowadays prefer to play board games online than at home. This is because online board games are easy to start and can be played by several people at the same time,” notes the report.
Afsar says, “Anyone with a smartphone is a potential user for us.”
Given its user base and increased customer loyalty, Gameberry Labs is now looking at how it can make this connection stronger. One of the main goals will be to build some sort of community network around these games.
“A game like Ludo is a social network and we’re looking at what kind of social experiences we can build around this community,” Afsar says.
Gameberry Labs’ next mission is to build a club around board games so that people have the space to interact. For example, the startup has introduced a microphone feature in these games to allow participants to talk to each other to strengthen social bonds.
Gameberry Labs believes that such clubs deepen the social layer in the games and provide a premium experience to users or players. This is also expected to create a new monetization route for the startup.
Plans for the future
Gameberry Labs is also actively looking at the US market, especially with the Parchisi version, and believes that the strong gaming tradition in that country will give the startup a good chance to generate higher revenues. At the same time, it wants to build a deeper connection with its user base.
The Ludo segment of board games is very crowded and competitive considering the number of such publishers in the Google Play Store.
According to Lokesh, with Google Playstore boasting 5,000 Indian game publishers offering more than 18,000 games, the path for Gameberry Labs is clear. He adds that even after the lockdown was lifted, the time users spend on mobile video games has increased by 10-15 percent.
Afsar says: “The quality of our products, along with the social experiences they provide, support us, but we will constantly innovate to improve.”
Gameberry Labs did experiment with other types of board games, but had to discontinue them due to lack of traction. The core focus is currently on Ludo Star and Parchisi.
Given Gameberry Labs’ history as a bootstrap startup, it has no immediate plan to attract outside funding and will only look at this option if it aims for some sort of accelerated growth.
“Our next step is how we can achieve $100 million in revenue in one year and we are confident that the year 2023 will be the trigger to reach that goal,” Afsar said.
India is likely to be a potential major market for startups like Gameberry Labs as the market size for the casual game segment is expected to reach Rs 16,900 crore by 2025 and the increased penetration of smartphones with cheap internet subscriptions will only make this pie bigger.
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