Loco, a gaming-focused streaming platform, faces significant challenges with its monetization model. Despite raising $51 million in funding, including a $42 million Series A round in 2022 led by Hashed, the platform has seen a drastic decline in its Daily Active Users (DAUs) and a reduced number of streamers over the past month and a half. Loco's team is reassessing its monetization strategies after their Advertising Video On Demand (AVOD) model failed drastically.
A Brief History and Recent Struggles
Loco was acquired in 2018 by Anirudh Pandita and Ashwin Suresh, founders of Pocket Aces. Originally known as the Showtime App, a live trivia game show app, Loco transitioned into a game streaming platform in 2020. The platform has raised substantial funding from investors like Krafton, Lumikai, and Hiro Capital.
In November 2023, Loco laid off 40 employees out of its 110-member team. A senior gaming and esports stakeholder commented, “The absence of a robust monetization model led to substantial expenditures on established YouTube streamers, whose audiences did not migrate permanently to Loco's platform as anticipated.”
Monetization Challenges
The failure of Loco’s AVOD strategy significantly impacted its revenue. Despite heavy investments in user acquisition, Loco currently hosts only a few streamers, primarily broadcasting games like BGMI and GTA V to small audiences. Major esports teams in India, such as S8UL, Godlike, and Global Esports, have streamed on Loco. The platform also hosted tournaments in collaboration with global publishers like Krafton, Activision, and Riot Games, but it now lacks popular streamers.
An industry source noted, “Loco invested heavily in streaming rights for major tournaments but failed to see corresponding financial returns. Competing with established players like Twitch or Kick requires huge investments.”
Future Plans and Potential for Recovery
Despite current challenges, Loco plans to bounce back by reassessing its monetization approach. A source familiar with Loco's operations mentioned, “We don't view our investment in acquiring streamers from the gaming community as a failure. While our AVOD model failed, our subscription-based offerings received a positive response. We are also testing new features which cannot be done when the app or website is at its full potential.”
When asked about potential shutdown plans, the source clarified, “We are experiencing a slowdown, but there are no plans to cease operations.”
Impact of Pocket Aces Acquisition
RP-Sanjiv Goenka Group-owned music label Saregama recently acquired a majority stake in Pocket Aces Pictures Pvt Ltd, the parent company of Loco. Saregama acquired 51.8 percent shares for Rs 174 crore and plans to acquire another 41 percent stake in the next 15 months. However, a source close to the development stated that Loco remains a separate entity, and this acquisition does not impact Loco’s structuring.
Awaiting Official Response
Storyboard18 attempted to contact Anirudh Pandita, Founder of Loco, for comments on potential fundraising efforts to sustain the platform or the current state of affairs at Loco. As of now, there has been no official response from Loco. The story will be updated if Loco issues an official statement.
