Pixel P&L: The New War on Video Games

Good Morning. It’s Thursday, July 18. In today's feature story, we explore the legal background of a controversial disclaimer about video game addiction in a Tamil movie. We also report on tax notices hitting Nazara’s subsidiaries and Riot Games’ new partnership with an internet cafe chain in The Philippines.

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What started as a regulatory mishap—lumping video games with gambling under the blanket term ‘online gaming’—has spiraled into an unbelievable scenario. A recent Tamil movie, "Garudan," features a scene where a kid plays a mobile game, complete with a disclaimer warning of addiction—just like you’d see for cigarettes and alcohol.

The gaming community is in uproar. Reddit threads are buzzing with Tamil gamers who are shocked, amused, and outright incredulous. Is this the beginning of video games being slapped with the same health warnings as dangerous substances?

Dive into our latest feature where legal guru Abhishek Subbaiah untangles the outdated laws and bureaucratic chaos in India leading to this mess. He calls for the gaming industry to fight back against these draconian regulations. Subbaiah doesn't mince words: if things don’t change, we're looking at an Orwellian future where gaming is unfairly equated with gambling, cigarettes, and alcohol. The time for action is now!

Online gaming and sports media company Nazara Tech disclosed in an exchange filing on July 17 that two of its subsidiaries have received tax notices amounting to INR 1,120 crore in an ongoing goods and services tax-related matter. 

The subsidiary Openplay Technologies Pvt Ltd was issued a show-cause notice on July 16 from the director general of GST Intelligence, Kolkata, proposing a liability of INR 845.72 crore for the period from 2017-18 to 2022-23. Another unit, Halaplay Technologies Pvt Ltd, received a notice for a proposed tax liability of INR 274.21 crore for the same period.

Nazara indicated that these claims stem from a dispute over the calculation of GST based on player pools rather than gross gaming revenues. "Both subsidiaries are reviewing the notices with their legal counsels and tax advisors to determine their future course of action," Nazara Tech stated.

The impacted units contributed less than 2 percent of Nazara’s revenues and less than 1 percent of its profit, as per the March 2024 quarterly results. 

This move by tax authorities is part of a broader crackdown on skill-based gaming firms, with companies like Dream Sports, Gameskraft, Games 24x7, Delta Corp's Deltatech Gaming, and Head Digital Works (A23) also facing retrospective tax notices for alleged tax evasion.

Cult Classic Anime "Ramayana: The Legend of Prince Rama" Set for Indian Theatrical Re-Release

The 1992 anime film "Ramayana: The Legend of Prince Rama" is set for a theatrical re-release in India, following a remastering of the film, according to a report from Bollywood Hungama. This decision comes amid renewed interest in the film, which has been cited for its faithful adaptation of the Hindu epic Ramayana, especially after the recent dissatisfaction with "Adipurush." Social media activity has showcased clips from the anime, underscoring its strong recall value and cult following. Discussions are underway with distributors for a wide release, potentially slated for September or October, with a final date announcement expected soon.

Asia-Pacific to Lead as Gaming Ad Revenue Hits $147.9 Billion by 2028

Advertising revenue in the gaming sector is poised for significant growth, with projections indicating it will reach $147.9 billion by 2028, according to PwC’s Global Telecom and Entertainment & Media Outlook 2024–2028 report. This marks a substantial increase from the $72.4 billion generated in 2023, underscoring advertising as a key revenue driver in the gaming industry. Despite challenges such as app tracking transparency impacting mobile advertising, PwC predicts that in-game advertising will surpass app-based social and casino games revenue by 2028, which is expected to grow to $106.6 billion. This trend highlights a global obsession with gaming, with total revenue from games reaching $227.6 billion in 2023 and projected to exceed $300 billion by 2028, driven largely by the Asia-Pacific region.

Riot Games Partners with TNC to Launch "Riot Unlocked" in the Philippines

Riot Games has partnered with net café chain TNC to launch "Riot Unlocked" in the Philippines, allowing gamers at select branches to access all League of Legends champions and thousands of skins starting July 15. This initiative aims to rejuvenate the local internet café scene by offering exclusive in-game perks. Riot Games Philippines is leveraging this traditional model to support grassroots gaming communities, inspired by the success of its national competition, Liga Republika. The program will be available at various TNC locations, as part of Riot’s strategy to enhance the League of Legends experience and foster a robust competitive environment.

GamingCon Partners with PlayStation for Mumbai Debut

GamingCon, touted as India's largest gaming festival, has announced a partnership with PlayStation. The event is scheduled to debut at the NESCO Center in Mumbai from November 30 to December 1, 2024. Spanning over 5,000 square meters, GamingCon promises a diverse array of gaming experiences and will showcase more than 100 gaming, tech, and lifestyle brands. The collaboration with PlayStation is expected to draw significant attention, enhancing the festival's appeal to gaming enthusiasts across the region.

Did you know that a former UK Speaker of the House is lending his voice to a robot Speaker in the Fallout London mod? 

John Bercow, who served as Speaker of the House of Commons from 2009 to 2019, is venturing into the world of voice acting. He will portray a robot Speaker of the House in Fallout London, an expansion-sized mod for Fallout 4. This unique casting was revealed by Dean Carter, the project's lead, in the mod's Discord channel.

Fallout London reimagines a post-apocalyptic version of the UK's capital, where the traditional role of the Speaker of the House—typically presiding over parliamentary debates—will be filled by a robot. Fans eagerly await the mod's release, which was initially set for April 23, 2024. However, the timeline was reconsidered after Fallout 4 developer Bethesda announced an unforeseen update for the game, potentially affecting the mod's launch. Despite this, developer Team FOLON has assured that "the end is in sight" for the project's completion.