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fantasy sports: Gameskraft to discontinue super app Gamezy amid Rs 21,000 crore tax demand

Bengaluru-based online gaming company Gameskraft, which is staring at a potential Rs 21,000 crore goods and services tax (GST) payout, will phase out its super app Gamezy, the company said in a statement.

Gameskraft offers various real money and casual games including ludo and card games.

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The company was building Gamezy as a super app for online games which hosted multiple products. In addition to fantasy sports, Gamezy also hosts rummy and is in the process of migrating its rummy users to separate apps. It will discontinue the standalone fantasy sports offering Gamezy Fantasy from the super app from September 18, according to a notice on the app.

The development has come days after the Supreme Court stayed the Karnataka High Court’s judgment that overturned the Directorate General of GST Intelligence’s order imposing a Rs 21,000 crore goods and services tax demand on Gameskraft. The matter is expected to be heard next by the Supreme Court on October.

Gameskraft said in a statement that the change in strategy of moving away from its superapp to individual gaming apps was not related to the recent announcement on GST.

“Over the last couple of years, the Gamezy superapp has provided our players a variety of different games, displayed great innovation, introduced a range of inventive product variants and consistently provided new user experiences that have been greatly appreciated,” the spokesperson said.

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“However, both prevailing industry trends and our internal insights have underscored the need for deep category specific experiences to provide a wholesome immersive gameplay to our players. Given the vision with regards to our portfolio, we have made a strategic decision to reassess and temporarily deprioritize our Gamezy superapp,” the company spokesperson said, adding that the they wail focus on the development and promotion of dedicated single apps like newly launched RummyPrime and LudoCulture. “This focus allows us to concentrate on our core competencies and channel greater resources towards delivering unparalleled user experiences,” the company noted. “We would like to share that this periodic reassessment of strategic prioritisation will not have any negative impact on our workforce planning and talent deployment”.

Also read | Gaming platform Fantok suspends operations citing impact of 28% GST levy

The Gamezy development was first reported by online news portal Inc42.

Online gaming companies, especially in the real money gaming segment, have been impacted by the GST Council’s decision to impose a 28% levy on online gaming at full face value. Following the announcement of this decision last month, companies in the space have started pulling back, including, in some cases, shutting down.

On August 21, card game platform Spartan Poker announced cutting down 40% of its workforce, by laying off 125 people. Kavin Bharti Mittal’s Rush Gaming Universe also said it was laying off 55 staffers while Mobile Premier League (MPL) announced laying off almost 350 people from its payroll, and cited the impact of the GST announcement for the decision.

Early-stage real money gaming app Quizzy also shut down as a result of the developments in the tax landscape and regulatory environment, the startup said.

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