Looking to score big: How MPL is making a business out of online gaming

Mobile gaming
It was a bittersweet moment for Sai Srinivas Kiran G when the Indian cricket team lost in the semi-finals of the World Cup. Like every other fan, he was disappointed but as an entrepreneur he was relieved. 

Sai is the co-founder and CEO of Mobile Premier League (MPL), a mobile-first gaming platform, which offers skill-based multiplayer games. And every time India played, the number of users on MPL dropped. “It is like the concurrent number of viewers on Hotstar,” says Sai. But in the reverse. The more nail-biting the match, the fewer people look at their phones and hence, the less their temptation to engage with apps. The logic is airtight.

 “But these users return during the innings break to play everything they can,” he adds. Something is interesting in Sai’s statement — the fact that users find ways to return whenever they get free time.

There are 12-14 free hours in a day if you take out a typical eight-hour school/workday. There are a lot of companies vying for the customer’s attention in those free hours. Facebook and Twitter want your attention to give you a rush of dopamine and validation. TikTok with snackable content, Netflix with movies and TV shows and the likes of MPL and Dream11 with gaming. All of these compete with basic human functions like eating and sleeping. 

Factbox
Famously, in 2017, Reed Hastings, CEO, Netflix had said that the company competes with sleep. “And we are winning,” he said back then. In 2019, in a letter to the shareholders, the company wrote that it isn’t Disney+ or HBO that worries it but Epic Games’ popular multiplayer game Fortnite.  And which is why it is important to examine MPL. Not just because in the larger sense games compete with Netflix but because it is all about habit formation. MPL is trying to do just that. 

There is investor traction as well. MPL, since it was founded by Sai and his co-founder Shubham Malhotra in September 2018, has raised $40 million from investors such as Sequoia Capital (India), Go Ventures, BeeNext, and  Base Partners.  

“MPL has built a highly engaging e-sports platform for India that has surprised us with the rate of growth and adoption among mobile internet users,” said Shailendra Singh, managing director, Sequoia Capital (India). “We believe MPL has the potential to become a significant platform for game developers to launch and monetise new games in India.”

The beginning 

When Sai and Malhotra left Hike, they noticed a gap in the market. “Playstation and Xbox are the console winners. Steam is for PC but there is nothing for mobile,” says Sai. And so they set out making MPL. 

Business model

How does MPL work? “Let’s say you want to play pool. You get on MPL, select pool and play,” Sai says. Customers also can pay to play in tournaments. 

The participation fee is usually between Rs 10 and Rs 50. “The winnings could be anything from Rs 35 to Rs 3 lakh. It depends entirely on the number of players,” he says. That’s where it gets tricky. MPL takes 20 per cent of the total money raised from player participation in tournaments as hosting fees. “Other e-sport hosts take 30 per cent,” he says. This means the prize money is higher. 

Sai Srinivas Kiran G, founder of MPL

 
So, how does MPL nudge customers from free tournaments to those that pay? “We don’t. Currently, all we want to do is give users enough games to play,” he says. 

 
Sai explains the company is in its infancy and currently he is working on just the first part of his funnel: Creating enough supply and then turning gaming into a habit. Investors in the sector say that creating supply means generating curiosity and converting free to paid customers depends on value addition. 

In this case, value addition is the possibility of winning cash. And MPL has a relatively small entry fee, which helps the process. But this isn’t the only way MPL plans to make money. “In 18 months, we will do ads and push in-app purchases,” says Sai. Free users will be shown ads and paid users will get to win money, and both get to buy within games to raise the experience level. But it is difficult. 

Shubham Malhotra, founder of MPL
MPL has 25 million instals. Sai claims that it has about 10 million monthly active users, 80 per cent are men and a majority are from tier-II cities. But when it comes to advertisers, they prefer to target such customers on Facebook and Google. In-app purchases in India is still a concept that is being debated.

The road ahead

MPL entered Indonesia last month. Its connections with Go Ventures helped. Sai and Malhotra have also raised cash from Base Partners, which is based in Brazil, and the company has the ambition to launch games in South America as well.

This is a network business

EXPERT TAKE

Abhishek Goenka Head, RPSG Ventures

In the last couple of years, there have been a few macro changes: Some like Jio is quite obvious but the others have passed under the radar. There are around 30 million people online but my research says only about 3 per cent actually transact in the commerce sense.

Now, due to the availability of cheap smartphones with large memories and the popularity of micropayments, the lower end of this pyramid is getting active. Indians have always been into gaming, be it through rummy or poker. The question was always how to monetise this enthusiasm. At that time, the challenge was because it was gambling. In MPL, they caught on to cricket because it was a low hanging fruit and then introduced a skill-based reward system to expand the portfolio. The smartphones, cricket and this reward system clicked with users and you see these companies becoming immensely popular.

This is a network business: One person tells another to play with him or her, and then everyone is playing together. And that is why this company is bound to succeed in any market, be it India or abroad.