Mobile Premier League (MPL)-backed Web3 fantasy gaming platform Striker has reportedly become the latest casualty of the GST Council’s decision to levy 28% GST on the online gaming sector.
The gaming platform is winding up its operations, Moneycontrol reported citing sources. However, there was no clarity on the timeline for the shut down and what will happen to the company’s existing employees. Even cofounder Krishna Mohan Vedula has reportedly left the company.
MPL declined to comment on Inc42’s queries on the development.
Founded in 2022 by former MPL employees Vedula and Nitesh Jain, Striker allows users to collect and trade digital collectibles and cards centred around cricket. Users also have the option of redeeming and trading these cards on Striker marketplace to earn money. It also allows customers to make fantasy cricket teams and compete in contests and win prizes.
MPL provided tech and infrastructure support to the startup.
Meanwhile, Striker has been in the eye of the storm for quite some time. The 28% GST only added to its woes. The MPL-backed startup was locked in a full-fledged legal case earlier this year with Dream Sports-backed Rario over the former’s non-fungible token (NFT)-focussed fantasy gaming offerings.
In a petition before the Delhi High Court (HC), Rario had alleged that Striker’s collectibles used identifiers and caricatures of nearly 170 cricketers that the Dream Sports-backed company had exclusive licences for.
Eventually in April this year, the HC threw out Rario’s plea seeking interim injunction, noting that the data used by Striker was publicly available and could be used by anyone.
A few months later in October, 28% GST on real money gaming came into effect and left the entire ecosystem in troubled waters. Striker too was badly hit. This piled on top of 30% tax levied on profits from trading of virtual digital assets and 1% TDS that took away users from Striker and left it further deep in trouble.
As crypto and gaming space became less attractive bets for investors, waning user numbers, a major legal case and funding winter set Striker on a downward path.
However, Striker is not alone in this. The 28% GST has also hit its peers hard in the online gaming ecosystem. While many such as Fantok and Quizzy have temporarily shut down operations, others such as MPL and Hike have resorted to mass layoffs to cut costs and streamline operations.
Striker’s competitor Rario, earlier this year, saw a full-scale internal tussle between cofounders Ankit Wadhwa and Sunny Bhanot and investors. After a tug of war, the two were said to be reportedly exiting the company while investor Dream11 began exerting more control over the operations of the firm.
MPL Acquires Good Game Exchange
Meanwhile, the crypto sector continues to see a consolidation wave. MPL has reportedly acquired NFT marketplace Good Game Exchange (GGX) for $12.75 Mn.
As per Entrackr, the MPL board has passed a special resolution to acquire the business and assets of GGX Protocol and is buying out the tokens of the startup’s existing investors. The deal, however, involves the issuance of 25.19 Lakh Series E preference shares to the existing investors of GGX as payout for the acquisition.
It is pertinent to note that MPL acquired a 20% stake in GGX in 2022 while the majority of ownership still lay in the hands of investors and staff members.
As the entire ecosystem braces for a meltdown and increased compliance, it remains to be seen how the Indian online gaming ecosystem emerges from the shadow of this regulatory quagmire and the raging funding winter.
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