Non-RMG games set to surge in India: 3 in 4 gamers already spending, ARPU just $3, says report

India’s gaming landscape is undergoing a transformative shift, driven by the rapid rise of Non-Real Money Gaming (Non-RMG), according to a new report by Lightbox, a Mumbai-based consumer-tech VC fund. Titled India’s Gaming Inflection: Non-RMG at Scale, the report highlights how India’s young, mobile-first gamer base, combined with regulatory clarity, is creating a fertile ground for a sustainable and fast-growing gaming ecosystem.

With nearly 420 million gamers, India ranks as the world’s second-largest market after China. Despite strong download numbers, monetisation has historically lagged, presenting a substantial growth opportunity. The enactment of the Promotion and Regulation of Online Gaming Act, 2025, banning real-money games (RMG) and their advertising while imposing strict penalties, has accelerated this shift toward Non-RMG. Prior to the law, RMG contributed up to 86% of the market, but Non-RMG games now enjoy regulatory legitimacy and strong tailwinds.

Sandeep Murthy, Managing Partner at Lightbox, commented, “Indian gaming is no longer just about scale. With the right content, community, and monetisation strategies, India can transition from a volume-driven market to a value-driven gaming giant. Nearly three-quarters of gamers are already spending on Non-RMG, with over 30% spending ₹1,000 or more per month.”

Globally, the gaming market is expected to grow from $177.9 billion in 2024 to $198 billion by 2027, with more than 3.42 billion players worldwide. However, India trails the US (ARPUs $215) and China ($68), with just $3.03, indicating immense potential for growth.

In India, Non-RMG monetisation relies on in-app purchases, subscriptions, advertising, and hybrid models. The FICCI-EY report projects in-app purchases to grow at a 20% CAGR. Advertising revenue grew 10% in 2024, with casual and hyper-casual games offering brands access to young audiences across Tier I–III cities. Esports revenue reached $100 million, with sponsorships contributing 61%.

Lightbox’s report, leveraging insights from Rooter, India’s largest game streaming platform, found that 74.9% of gamers spend on Non-RMG in-app purchases, with 31.2% spending ₹1,000+ monthly. Spending is distributed across both short and long session players. Popular spend categories include battle passes (40%), cosmetics (37%), and unlockable content (23%). Regional language content dominates, with 34% preferring Hindi-first, followed by Tamil and Telugu, highlighting the importance of hyper-localisation.

Emerging growth drivers include game-based learning (valued at $873.3 million in 2024, projected $5.39 billion by 2033), cloud gaming ($9.98 million in 2024 to $1.3 billion by 2030), and AI-enabled personalisation for gameplay and monetisation. The report underscores hybrid monetisation, live-service cadence, and UPI-friendly microtransactions as key strategies to engage high-value users.

Online Gaming Bill and regulatory framework

The real-money gaming ban is already enforced industry-wide, though some companies have challenged it in court. The government has yet to notify the law officially, which was passed in the monsoon session of Parliament within 72 hours of Cabinet approval.

The Promotion and Regulation of Online Gaming Bill, 2025, prescribes up to three years’ imprisonment or a Rs 1 crore fine for offering or facilitating RMG, with unlawful advertising punishable by up to two years’ imprisonment or Rs 50 lakh fine. Offences are cognisable and non-bailable under the Bharatiya Nagarik Suraksha Sanhita, 2023. CERT-IN will block apps violating the law, and Interpol may assist with offshore operators. IT Minister Ashwani Vaishnaw clarified that players face no penalties.

The Act empowers the government to constitute a regulatory authority for recognising, categorising, and registering online games. Gaming firms, treated as intermediaries under IT Ministry amendments, must comply with KYC norms, parental controls, and age-rating mechanisms. Minors remain free to play social games and e-sports, with budget allocations to promote online social gaming in India.

India’s Non-RMG sector is now poised for rapid expansion, driven by regulatory clarity, a large gamer base, emerging monetisation avenues, and culturally resonant content, setting the stage for a global gaming powerhouse.