Nazara is recovering from one of the most bruising quarters in its history.

The Mumbai-based listed gaming major reported a loss of INR 34 Cr in the second quarter (Q2) of the financial year 2025-26 (FY26), after it wrote off nearly INR 1,200 Cr worth of investments in PokerBaazi and Freaks4U, thanks to the real-money gaming (RMG) ban in India and its sudden collapse in Europe due to the ‘esports winter’ in the region.

Nazara, which had a 47.7% stake in Moonshine Technology, the parent company of online poker platform PokerBaazi, had it coming when the Indian government dropped the bomb on the industry in the form of the Promotion and Regulation of Online Gaming Act, 2025, prohibiting all forms of online money games, regardless of whether they are based on skill or chance.

PokerBaazi couldn’t ignore the compliance, and, as a result, terminated all its money game offerings with immediate effect. Rather than waiting for regulatory clarity, Nazara wiped the slate clean, reducing the asset’s value on its books.

In Q2 FY26, Nazara recognised an aggregate reduction of INR 914.7 Cr in its investment in PokerBaazi, shedding nearly 90% of the investment value to a mere INR 96.5 Cr.

“From Nazara’s perspective, we usually like to keep our books clean and take a conservative approach, which is why we went ahead and took this impairment up front in this quarter itself,” Nitish Mittersain, CEO of Nazara Technologies, said in the company’s Q2 earnings call.

Europe is another simmering concern for Nazara. The region is facing a slowdown due to falling sponsorships, reduced investment activity, and monetisation challenges. Besides, layoffs in the sector have grown unabated globally, and many esports companies across Europe have shut down altogether. AI is also disrupting the sector, leading to further cuts in both marketing budgets and staffing.

Through its former subsidiary Nodwin Gaming, now an associate company, Nazara had invested in Freaks4U, an esports services firm operating in a region that once accounted for some of the industry’s most valuable sponsorships.

Nazara also booked a loss of INR 223.7 Cr in Q2 due to Nodwin’s impairment of its investment in Freaks4U.

The twin impairments seem to have catalysed Nazara’s pivot away from an aggressive expansion strategy and toward a more integrated strategy.

Earlier this month, Nazara revealed a new brand identity and logo, which reflects a broader strategic reset. Out of these setbacks has emerged a clearer plan — focus on durable intellectual property, accelerate game development through AI, and build a........

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