Gaming Giant Faces Setback Amid Regulatory Headwinds
Mumbai-based gaming company Nazara Technologies made headlines after reporting a consolidated net loss of Rs 29.35 crore in Q2 FY26, a sharp turnaround from a profit of Rs 23.83 crore a year ago. The loss is largely attributed to accounting adjustments linked to India’s new real-money gaming regulations and a major write-down of its investment in Moonshine Technologies following the government’s ban on online skill-based real-money gaming.
While the loss grabbed attention, the numbers behind the scenes tell a different story: Nazara’s core gaming operations are on a rapid growth trajectory, signaling that the company is not slowing down despite regulatory challenges.
Revenue Rockets 65% to Rs 526 Crore
Nazara’s operational performance continues to impress. Revenue from operations for Q2 FY26 surged 65% year-on-year to Rs 526.46 crore, driven by mobile gaming, PC and console publishing, and offline interactive entertainment. Sequentially, revenue increased 5.5%, demonstrating steady momentum despite the regulatory headwinds.
The growth is largely fueled by deeper engagement in LiveOps, stronger retention trends, and an expanding cross-platform distribution network. Mobile gaming continues to be the largest contributor, with popular global franchises such as Love Island, Big Brother, Kiddopia, Animal Jam, and World Cricket Championship leading the charge.
Strong First Half Sets Stage for FY26
For the first half of FY26, Nazara posted Rs 1,025.2 crore in revenue, an impressive 80.2% increase from H1 FY25. EBITDA also showed strong growth, climbing 118.5% to Rs 109.4 crore. This indicates that while the Q2 loss grabbed headlines, the underlying business is thriving and maintaining robust profitability at the operational level.
The company’s focus on diversified gaming portfolios and high-quality content has allowed it to navigate the regulatory challenges, keeping user engagement and monetization metrics strong.
Moonshine Write-Down: The Regulatory Impact
The Rs 29 crore loss was primarily due to the write-down of Nazara’s investment in Moonshine Technologies. The Indian government’s clampdown on online skill-based real-money gaming has affected several companies in the sector, and Nazara’s accounting adjustments reflect the new compliance landscape.
Despite this, the company remains confident that its diversified gaming model will allow it to continue growing revenue from its mainstream operations, which are largely unaffected by the real-money gaming ban.
Mobile Gaming and Global Franchises Drive Growth
Mobile gaming remains Nazara’s strongest growth engine. Popular titles like Love Island, Big Brother, Kiddopia, Animal Jam, and World Cricket Championship have fueled user retention and monetization. The company has also focused on enhancing cross-platform engagement, offering users more seamless experiences across mobile, console, and PC gaming.
The expansion of LiveOps engagement—wherein games receive regular content updates to keep users hooked—has played a crucial role in increasing player retention and boosting in-game spending.
Strategic Outlook for FY26
Nazara is optimistic about the second half of FY26. With a growing pipeline of new games and a strong international presence, the company is well-positioned to capitalize on India’s booming gaming market. Its focus on diversified platforms, global franchises, and interactive entertainment gives it resilience against regulatory shocks while providing avenues for sustained revenue growth.
Analysts note that while the Q2 loss makes headlines, the underlying fundamentals of Nazara’s business remain solid. The company’s ability to grow revenue, maintain operational profitability, and expand its gaming portfolio positions it as one of India’s leading gaming firms in a rapidly evolving market.
Nazara Technologies’ Q2 FY26 report is a classic example of headline loss masking strong operational growth. Despite a Rs 29 crore net loss due to regulatory write-downs, the company posted a 65% jump in revenue and saw EBITDA surge in the first half of the year.
With mobile gaming at the forefront, LiveOps engagement rising, and global franchises driving retention, Nazara continues to show that India’s gaming landscape is full of opportunities for companies willing to innovate and diversify. Regulatory bumps may temporarily affect profits, but the long-term growth story of Nazara Tech is far from over.
