Mobile Premier League (MPL), the e-sports and skill gaming company, had had to resort to laying off about half of its India workforce because it is struggling with a tax burden, which has increased by 350 to 400 per cent! That means almost 350 employees will be let go.
As per the new GST rules, the firm will have to pay 28 per cent tax on full deposit value. Till now, gaming platforms used to pay 18 per cent GST on platform charges. This big a hike in tax burden has forced the platform to reduce headcount.
The platform’s variable costs comprise mainly people costs and costs pertaining to workplace infrastructure and server. Ways to save costs related to server and infrastructure have already been looked at.
In May 2022, the platform had quit in Indonesia, which had resulted in over a 100 people losing their jobs. About five months later, it had reportedly managed to raise about $150 million to become a unicorn. The platform was then valued at $2.3 billion.
The company, which is about five years old, was founded by Sai Srinivas and Shubh Malhotra, to offer more than 60 games including, puzzles, casual games, board games, quizzes, and even daily fantasy sports. It has more than 90 million registered users across Eruope, Asia and North America.