Online gaming ban: MPL to cut 60% staff in India
What's the story
Mobile Premier League (MPL), a leading Indian online gaming app, is set to lay off nearly 60% of its workforce in India, according to Reuters. The decision comes as a reaction to the government's recent ban on paid games. Around 300 out of MPL's total 500 employees in India will be affected by this move.
Industry reaction
Impact of the government's ban on online paid games
The ban on online paid games by Prime Minister Narendra Modi's government has sent shockwaves through the Indian gaming industry. The government cited financial and addiction risks, particularly among the youth, as reasons for the ban. The move has led to the shutdown of several gaming apps that offered paid fantasy cricket, rummy, and poker games.
Strategic shift
Shift toward free-to-play games, US market expansion
In light of the ban, MPL is now focusing on free-to-play games and expanding its business in the US market. The company source said that the layoffs would affect employees across various departments, including marketing, finance, operations, engineering, and legal. In an internal email to staff on Sunday, seen by Reuters, MPL CEO Sai Srinivas announced a major downsizing of their India team.
CEO statement
MPL CEO's email to staff
In his email, Srinivas acknowledged the difficult decision to downsize and promised support for those affected during this transition period. He noted that India accounted for 50% of M-League's revenues, and this change would mean no revenue from India in the near future. Despite being backed by Peak XV Partners (formerly Sequoia Capital India) and valued at $2.3 billion in 2021, MPL is now facing tough times due to these changes.
Market response
Industry-wide impact and legal challenges
Along with MPL, other players in the industry, such as Dream11, have also stopped their fantasy cricket offering. Several other apps providing paid poker and rummy card games have also ceased operations. A23, an Indian gaming company, was the first to challenge the government's ban last week, but both MPL and Dream11 have chosen not to take legal action against it.