Update: As many of our readers have pointed out, and rightly so, Reliance Entertainment is claiming that Zapak has broken even.
Original Story: Reliance Entertainment President Rajesh Sawhney has disclosed claimed that Zapak, the online gaming businesss from the Reliance ADA Group had reported revenues of $3 million for the last quarter, and has broken even. What’s interesting is that only $1 million of the revenues were from advertising: Sawhney told MediaNama that the rest was from other revenue streams like subscription, and in particular – Events.
So it appears that Events are becoming a major component of Zapak’s business: a couple of days ago, the company announced the Zapak Gaming Championship with Gillete Mach 3 Turbo Winner razor as its headlining sponsor, and with total prizes worth Rs. 1 crore. Prior to this, they had organized the Zapak Corporate Gaming Championship, with Timesjobs as the lead sponsor, and gifts as prizes. Zapak claims a registered user base of 6 million users.
What we’d really like to know about, is how much money Zapak is earning any money from in-game sales – are users playing its Massively Multiplayer Online Game paying to upgrade their racing carts, buy avatars etc., or are they just being given upgrades as prizes or for loyalty? The fact remains that while revenues may be coming from the offline component, the opportunity for scale exists on the Internet – online advertising and in-game commerce should be its primary source of income, and that doesn’t appear to be the case. Dependency on offline events alone will limit Zapaks revenue growth – how many events can they do in a year?