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

The year 2025 is set to be a turning point for India's gaming landscape, following the nationwide prohibition of real-money gaming (RMG). The enactment of the Promotion and Regulation of Online Gaming Act has banned real-money formats, which include fantasy sports and skill-based games that require payment to enter. This legislative change has resulted in the closure of numerous startups and has significantly impacted leading companies like Dream11, a former sponsor of the Indian cricket team. The swift passage of the RMG Bill, which became law in just three days after its introduction on August 19, 2015, has dismantled a business model that thrived in the Indian market for over a decade. While the immediate consequences have involved job losses and funding halts, industry experts are beginning to view this ban as a potential catalyst for a long-term transformation. With the removal of RMG platforms, the focus of India’s gaming ecosystem is shifting towards esports, cloud gaming, AI-enhanced storytelling, and the cultivation of local intellectual properties. As India boasts over 500 million gamers and a predominantly youthful digital demographic, the country is evolving beyond its image as a hub for casual gaming. A report from Lumikai suggests that the Indian gaming market could soar to $9 billion by 2030, driven by immersive gameplay, live events, and creator-led ecosystems. The same report anticipates that the gaming sector will surpass $9.2 billion by the fiscal year 2029, achieving a compound annual growth rate (CAGR) of 20% over the next five years. Additionally, the market welcomed 23 million new gamers in FY24, bringing the total to 590 million. With a staggering 15.2 billion game downloads in the same fiscal year, India remains a leading force in mobile gaming worldwide. An EY report indicates that this sector could generate 250,000 jobs by 2025. The regulatory changes have prompted a strategic pivot among game developers, who are now moving towards sustainable monetization strategies, including season passes and digital collectibles. Global entities like Krafton and Bitkraft Ventures are increasing their investments in India, betting on the emergence of unique local content rather than relying solely on imported gaming formats. Sean Hyunil Sohn, CEO of KRAFTON India, highlighted that the global gaming industry has predominantly been shaped by non-RMG models. He noted that while RMG holds a significant share in India, it constitutes a smaller portion of the global market, which is often perceived as less reputable. Despite the challenges posed by the ban, Sohn believes that the regulatory framework could yield long-term advantages for the industry, establishing clear guidelines for what is permissible and enhancing the overall gaming environment. As monetization strategies evolve, Nitish Mittersain, Joint Managing Director and CEO of Nazara Technologies, emphasized that in-app purchases and advertising would continue to be vital revenue sources. He described the Indian gaming sector as being at a crucial juncture, where scalable models and original content are converging to foster enduring growth. Investors are also viewing the regulatory clarity as a positive development. Anuj Tandon, Partner at BITKRAFT Ventures, remarked that the RMG ban aligns India’s gaming landscape with that of other Asian markets, offering a clearer investment framework. However, Tandon pointed out that a significant challenge remains: the shortage of world-class talent in India. He suggested that attracting more global companies to establish operations in the country could help bridge this gap. The rise of esports has emerged as a promising area, gaining government recognition and being viewed as a community-building activity. The potential classification of esports as a sport under the new gaming act is seen as an encouraging sign for the industry. Yet, Tandon cautioned that while firms like Nodwin Gaming dominate the esports market, early-stage investments may not yield immediate returns in the coming years. With the exclusion of real-money gaming, India's video gaming sector now faces a critical transition from consumption-driven models to a creator-led ecosystem. The industry's success in reaching its ambitious $9 billion target will hinge on developing exceptional talent and creating original Indian intellectual properties that can compete globally.