Will 2025 be remembered as the year Indian gaming sector grew up or gave up?

The calender year 2025 marked a sharp reset for India’s gaming industry following the nationwide ban on real-money gaming (RMG). The Promotion and Regulation of Online Gaming Act, passed in 2025, prohibited real-money gaming formats, including fantasy sports and paid-entry skill games. The move led to the closure of hundreds of start-ups and delivered a severe blow to market leaders such as Dream11, once a sponsor of the Indian cricket team.

The RMG Bill, passed on August 19, 2015, became law within three days — among the fastest legislative turnarounds in the sector — and effectively wiped out a business model that had dominated Indian gaming for over a decade.

Ban or breakthrough?

While the ban has triggered layoffs and funding freezes in the short term, industry stakeholders increasingly see it as a long-term inflection point. With fantasy and card-based real-money platforms removed from the core, India’s gaming ecosystem is reorganising around esports, cloud gaming, AI-driven storytelling and the development of homegrown intellectual property (IP).

India, home to over 500 million gamers and one of the world’s youngest digital populations, is moving beyond its reputation as a market of casual players. According to a Lumikai report the gaming market could reach $9 billion by 2030, driven by immersive gameplay, live events and creator-led ecosystems.

According to the report, the Indian gaming market is expected to cross $9.2 billion by FY29, growing at a 20% CAGR over five years. The market added 23 million new gamers in FY24, taking the total to 590 million. With 15.2 billion game downloads in FY24, India remains one of the world’s largest mobile gaming markets. An EY report estimated the sector has the potential to create 2,50,000 jobs by 2025.

The regulatory shake-up has also forced a strategic correction. Game studios are shifting away from quick monetisation strategies towards more sustainable revenue models, including season passes, digital collectibles, vanity content and cross-platform IPs. Global players such as Krafton and Bitkraft Ventures are increasing their exposure to India, betting that the country’s next breakout moment will be led by original IP rather than imported formats.

Speaking to Business Today, Sean Hyunil Sohn, CEO of KRAFTON India, said the global gaming industry has historically been driven by non-RMG formats.

“Globally, the mainstream gaming business is on the video gaming or non-RMG side. RMG is a smaller segment, constituting less than one-third of the global gaming market or even lesser. Big video gaming companies are typically listed or part of major platforms (e.g. Microsoft, Sony), whereas many RMG companies are not. RMG is often viewed as somewhat ‘shady’ or ‘murky,’ bordering areas like betting and online casinos,” Sohn said. However, in India it made a majority share.

He added that despite the initial shock, regulation brings long-term benefits.

“The regulations, while a harsh and surprising decision for the RMG sector and its investors, are seen as overall positive from a macro perspective. They provide clear guidance on what is allowed and under what regulatory framework, which is beneficial for the larger audience, players, and the broader gaming industry,” he said.

For listed gaming companies, monetisation models are also evolving. Nitish Mittersain, Joint Managing Director and CEO of Nazara Technologies, said in-app purchases and advertising would continue to be major revenue drivers.

“India’s gaming sector is at an inflection point, with scalable models, original IP and global distribution coming together. Strengths in video, free-to-play and social gaming position the market for durable, long-term growth. 2026 offers a compelling window for sustained value creation,” Mittersain said.

From an investor standpoint, the regulatory clarity is being welcomed. Anuj Tandon, Partner – India & UAE at BITKRAFT Ventures, said the RMG ban aligns India with global markets.

“The online money gaming bill actually puts India at par with other Asian markets. For global investors, such as Bitkraft, it puts us in a good position that we can now exactly know what is investable and what is not from a regulatory perspective. It brings regulatory clarity,” he said.

What’s lacking?

Tandon noted that while India’s gaming industry is barely a decade old, compared with 30-50 year old markets such as Japan, China, the US and Europe, the country’s biggest constraint is talent.

“There is a lack of world-class talent in India. The thing that you can provide is you can invite more global companies to set up offices in India,” he said, citing Zynga’s entry into India in 2010. “Since then, you have had multiple small entrepreneurs building gaming studios out of Zynga employees. And that has created over $600 to $700 million of enterprise value for investors in the last 10 years.”

Esports has also emerged as a bright spot. The category has received government recognition, with esports and tournaments viewed as post-gaming content and community-building activities. The likely notification of esports as a sport under the online gaming bill is being seen as a positive signal for the ecosystem.

However, Tandon cautioned that near-term returns may be limited. While companies such as Nodwin Gaming dominate the market with around 80% share, “early-stage investment in e-sports is not very exciting for the next 2-3 years, though it’s a good strategic opportunity,” he said.

With real-money gaming effectively carved out, India’s video gaming sector now faces its most critical phase — transitioning from a consumption-driven market to a creator-led ecosystem. The industry’s path to its ambitious $9 billion target will depend on its ability to build world-class talent and produce original Indian IPs capable of competing on the global stage.