Paytm’s Fintech Core Stays Strong Despite Gaming Bet Misfire

• Paytm incurred a one-time ₹190 crore impairment on a loan to First Games Technology Pvt. Ltd.
• Regulatory actions, including the 2025 Online Gaming Act, led to the shutdown of its real-money gaming arm.
• Core fintech operations remain strong, with Q2 FY26 revenue up 24%.

India's major fintech company, Paytm, has incurred a net profit of ₹21 crore for the Q2 FY26 period, which ended in September 2025. Compared to previous quarters, the company's present valuation is marginally lower. 

This is because Paytm's earnings were hindered by a one-time ₹190 crore impairment associated with a loan given to its gaming joint venture, First Games Technology Pvt. Ltd., even though the company's core fintech activities stayed steady.

Paytm-First Games: A Misfired Gamble

First Games, Paytm’s gaming arm, began in 2018 as Gamespind, which was in the casual gaming sector, offering over 300 quizzes and trivia, arcade, racing, and many more. The service initially allowed users to obtain free Paytm cash by playing these games. First Games was launched in association with Hong-Kong-based AGTech Holdings, which provides premium lottery services in China. The app reported 80 million registered users in 2022.

After some time, they also introduced games like rummy, ludo, and a sports-fantasy title based on cricket, called First Captains, which officially made them a competitor against Dream11 and MPL. As a result, its operational revenue increased by 55% year over year to ₹19.4 crore by March 2020.

But the app reportedly overlooked the violations of gambling and real-money gaming laws, and got banned from the Google Play Store in 2020. Additionally, in early 2025, First Games received a GST show-cause notice for a significant amount of ₹5,712 crore (Jan 2018 to Mar 2023), amid India’s new Online Gaming Act.

The new regulation aims to curb real money gaming, prompting many companies of such gaming apps to get closed. This included Paytm’s First Games too, which officially shut down in August, announcing that they would now focus solely on social and non-monetary games in line with the updated legal framework.

However, with a 24% revenue increase to ₹2,061 crore in Q2 FY26, Paytm's overall fintech business is still strong. Nevertheless, the company highlighted that its gaming division functions as a joint venture and is not included in its primary financial statistics. Paytm also stated that it will now focus more on AI-driven finance.