PLUS: 28% GST Tax Blow to Online Gaming 💀

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Here are key highlights of this week:

• Google play allows games offering NFTs

• New tax on online gaming firms

• State of fundraising in Web3 gaming

Let’s get started!

Google Play Allows Games Offering NFTs

They want to give developers clear guidelines on how to incorporate NFTs into their Android games effectively. By doing this, they're paving the way for more innovation and exciting experiences in mobile gaming.

Transparency is a key focus of the new policy. Game developers will be required to let users know if their game is based on blockchain technology and if it includes tokenized digital assets like NFTs. This ensures that players have all the information they need to make informed decisions about the games they want to play.

One cool thing about Google's policy is that they allow NFTs to unlock in-app content, regardless of where the user purchased the NFT. This is different from Apple's approach, as they don't allow the same functionality. It's great to see Google embracing the possibilities that NFTs bring to enhancing the gaming experience.

However, Google is also being responsible with their new policy. They don't want developers to promote or glamorize crypto or NFT trading activities within the games. They're focused on ensuring that NFTs are used to enhance gameplay and progression, rather than for gambling or wagering purposes.

This policy update is a big deal because it shows that Google is embracing the future of gaming and the potential of blockchain technology. It sets them apart from their main competitor, Apple, who has taken a more restrictive approach to NFTs and crypto. While Apple charges fees and imposes limitations on NFT sales, Google is opening up opportunities for developers to explore and innovate in the world of blockchain gaming.

New GST Tax On Online Gaming Firms

The online gaming industry in India is facing a challenging situation with the government's plan to impose a 28% Goods and Services Tax (GST) on the funds collected by online gaming firms from consumers.

This decision has been met with strong opposition from industry players, who consider it catastrophic and unconstitutional. The GST Council, comprising federal and state finance ministers, has decided to levy the tax on online gaming, casinos, and horse racing, closing a loophole that allowed fantasy sports companies to classify their offerings as skill-based rather than chance-based.

This move is seen as a major blow to the fast-growing industry, which has witnessed significant investments in fantasy sports startups such as Dream Sports and Mobile Premier League.

Industry representatives, including the All India Gaming Federation and the E-Gaming Federation, have criticized the decision, labeling it as irrational and detrimental to the Indian gaming industry. They argue that the tax burden will render the industry unviable and lead to job losses, benefiting illegal offshore platforms instead.

Let's understand the impact of a 28% GST tax on online gaming with a simple example. Suppose you buy Rs 10,000 worth of chips and aim for a 35% ROI, which is Rs 3,500.

However, after applying the tax, the value of the chips you receive is Rs 7,200. To take home Rs 3,500, you now need a 220% return (Rs 15,000). Winning two hands consecutively has a 20.25% chance, and winning three hands straight decreases to 9.12%.

The tax, along with other deductions, significantly affects the odds and returns in online gaming, making it more challenging to achieve desired profits.

State of Fundraising in Web3 Gaming

Fundraising in the Web3 gaming sector has seen a slowdown recently, with projects struggling to secure new rounds of funding. The total amount raised has been decreasing every quarter since Q4'22. However, there is hope for a potential resurgence in investments as there is growing interest from the East.

Overall, the gaming category remains attractive within the Web3 sector, with various startups raising substantial amounts. Despite a slight decline in investor interest compared to the first quarter of this year, gaming projects focused on play-to-earn, blockchain casinos, collectibles, loot boxes, and football-themed games have received significant funding.

The recent funding rounds for Pomerium, Karate Combat, RACA, HyperPlay, and Illuvium reflect ongoing investor support for Web3 gaming initiatives.

More Game Updates

• Creators of STEPN app have announced their second social game called Gas Hero.

• Star Atlas started DAO Proposals to push boundaries for player governance.

• The Machines Arena began their first beta season and players could start playing directly through Epic Games Store.

• Infinigods have extended gameplay alpha for another week with exciting prizes awaiting for top players.

• DEADROP by 12am Studios revealed Snapshot VI with a brand new map, among many other game updates.

• Project Kyzen and Neo Tokyo collaborated and announced an inter-community game night on July 27th.

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