From RMG ban to esports glory: India's gaming rollercoaster in 2025
India’s gaming sector experienced a rollercoaster year, marked by a surge in online and live gaming, the shock of the real-money gaming (RMG) ban, the official recognition of esports, and startups’ efforts to optimise costs and shift focus to new opportunities.
With AI shaping game development and in-app monetisation taking centrestage, the industry ended the year poised for a strategic reset.
Here’s all that happened:
The RMG shockwave
August saw the passage of the Promotion and Regulation of Online Gaming Bill, 2025, which bans online games played with real money. The law also restricted advertising for such games and barred banks and financial institutions from facilitating transactions.
Industry leaders viewed it as a step towards rightfully differentiating skill-based gaming versus betting, and additionally, a lifeline to esports, giving it government recognition. However, the video game industry flagged concerns regarding the “blurred definition” of online gaming in the law.
In a letter to home minister Amit Shah, industry bodies including the India Gaming Federation (AIGF), E-Gaming Federation (EGF), and Federation of Indian Fantasy Sports (FIFS) cautioned that a blanket ban on RMGs could cripple a sector valued at Rs 2 lakh crore, cost the exchequer around Rs 20,000 crore annually in taxes, and push users to unsafe offshore platforms.
Also Read: ETtech Explainer: What’s the way forward for gaming industry after Lok Sabha clears Online Gaming Bill?
The major players affected included Dream11, Games24x7, MPL, Zupee, and Gameskraft — firms backed by marquee investors such as Tiger Global, ChrysCapital, and Alpha Wave Global. Following the ban, several companies scaled down or exited India, including Hike’s Rush, WinZo’s RMG operations (they expanded to the US), and MPL’s cash gaming services. Some, such as Dream Sports, optimised costs and restructured operations as part of their efficiency efforts.
Also Read: Online Gaming Bill 2025 protects savings of crores of Indian middle-class families: Ashwini Vaishnaw
For the first time, esports was recognised as an official sport, with oversight from the Ministry of Youth Affairs & Sports. Experts said this gives esports the same status as traditional games, opening the door to sponsorships, tournaments, and government-backed infrastructure.
Digital gold rush
The country’s digital media and entertainment market is valued at $9.3 billion for FY25, with gaming and interactive media emerging as the fastest growing categories.
Following the RMG ban, focus has shifted to digital gaming and esports. Industry reports say that vernacular content, and artificial intelligence (AI) led gaming will drive growth.
Moreover, with the UPI boom, consumers have shown a greater willingness to pay for digital experiences. This also made in-app purchases — rather than advertising —the sector’s primary revenue generator. All of this was further fuelled by over 560 million smartphone users, including a large, young, digital-first population.
Popular TV franchises like Bigg Boss, Taarak Mehta Ka Ooltah Chashmah, and Chhota Bheem entered gaming, boosting engagement and in-app revenues.
Startups driving innovation
More than 500 gaming startups have launched in India over the past five years, according to Bitkraft Ventures and Redseer Strategy Consultants. Domestic companies are now eyeing global acquisitions, while foreign investors and studios like Krafton and Bitkraft explore Indian IPs.
Key moves included:
Maharashtra proposed an India Gaming Mission with a Rs 500 crore fund to support gaming and esports ventures.
Startups are also increasingly focussing on social, free-to-play games, with mandatory registration, certification, and revenue transparency. Industry experts said that as passive viewing slows, interactive extensions (for products, features, etc.) are becoming a core monetisation and engagement lever.
Between 2005 and 2024, gaming startups in India raised over $3.7 billion from private equity and venture capital firms, according to Venture Intelligence. Most of this went into RMG ventures.
Legal and regulatory turbulence
In November, the enforcement directorate (ED) arrested Winzo’s founders on money laundering charges, alleging retention of Rs 43 crore in player funds despite the RMG ban, underscoring the risk of non-compliance.
ETtech Explainer: Winzo founders' arrests, centre’s fraud charges a moment of reckoning for Indian gaming
Also Read: ED widens net globally against online gaming
Demand for talent
The industry’s rapid growth is fuelling demand for creative and technical talent: game developers, narrative designers, animators, QA analysts, and more. India currently has 50,000–60,000 open positions, according to the staffing firm TeamLease Digital, across junior and senior roles.
Experts stressed the need to build a stronger talent pipeline through education and Centres of Excellence, in order to build indigenous IP.
AI: boon or bane?
Industry executives said that the rise of AI is democratising game development, making it easier for new and smaller developers to build high-quality games.
At the same time, it is starting to play a key role in reducing development timelines and production costs. Studios are beginning to integrate AI tools to create smarter non-player characters (NPCs), and generate realistic and dynamic game environments.
However, experts also cautioned that while AI can significantly reduce development time, the resulting surge in content may outpace user demand.
Looking ahead
Executives highlight that fiscal incentives, employment subsidies, and infrastructure support could accelerate growth of the gaming sector. While India ranks second in downloads, the average revenue per user (ARPU) remains low at $3.03, signalling that there’s room for improvement as incomes rise.
With AI shaping game development and in-app monetisation taking centrestage, the industry ended the year poised for a strategic reset.
Here’s all that happened:
The RMG shockwave
August saw the passage of the Promotion and Regulation of Online Gaming Bill, 2025, which bans online games played with real money. The law also restricted advertising for such games and barred banks and financial institutions from facilitating transactions.
Industry leaders viewed it as a step towards rightfully differentiating skill-based gaming versus betting, and additionally, a lifeline to esports, giving it government recognition. However, the video game industry flagged concerns regarding the “blurred definition” of online gaming in the law.
In a letter to home minister Amit Shah, industry bodies including the India Gaming Federation (AIGF), E-Gaming Federation (EGF), and Federation of Indian Fantasy Sports (FIFS) cautioned that a blanket ban on RMGs could cripple a sector valued at Rs 2 lakh crore, cost the exchequer around Rs 20,000 crore annually in taxes, and push users to unsafe offshore platforms.
Also Read: ETtech Explainer: What’s the way forward for gaming industry after Lok Sabha clears Online Gaming Bill?
The major players affected included Dream11, Games24x7, MPL, Zupee, and Gameskraft — firms backed by marquee investors such as Tiger Global, ChrysCapital, and Alpha Wave Global. Following the ban, several companies scaled down or exited India, including Hike’s Rush, WinZo’s RMG operations (they expanded to the US), and MPL’s cash gaming services. Some, such as Dream Sports, optimised costs and restructured operations as part of their efficiency efforts.
Also Read: Online Gaming Bill 2025 protects savings of crores of Indian middle-class families: Ashwini Vaishnaw
For the first time, esports was recognised as an official sport, with oversight from the Ministry of Youth Affairs & Sports. Experts said this gives esports the same status as traditional games, opening the door to sponsorships, tournaments, and government-backed infrastructure.
Digital gold rush
The country’s digital media and entertainment market is valued at $9.3 billion for FY25, with gaming and interactive media emerging as the fastest growing categories.
Following the RMG ban, focus has shifted to digital gaming and esports. Industry reports say that vernacular content, and artificial intelligence (AI) led gaming will drive growth.
Moreover, with the UPI boom, consumers have shown a greater willingness to pay for digital experiences. This also made in-app purchases — rather than advertising —the sector’s primary revenue generator. All of this was further fuelled by over 560 million smartphone users, including a large, young, digital-first population.
Popular TV franchises like Bigg Boss, Taarak Mehta Ka Ooltah Chashmah, and Chhota Bheem entered gaming, boosting engagement and in-app revenues.
Startups driving innovation
More than 500 gaming startups have launched in India over the past five years, according to Bitkraft Ventures and Redseer Strategy Consultants. Domestic companies are now eyeing global acquisitions, while foreign investors and studios like Krafton and Bitkraft explore Indian IPs.
Key moves included:
- Krafton acquired 75% of Nautilus Mobile for Rs 118 crore, bringing the Real Cricket franchise fully under its control.
- Blue Ocean Games, a Krafton-backed venture fund, launched a $30 million fund to support indie developers, with a focus on Indian talent.
Startups are also increasingly focussing on social, free-to-play games, with mandatory registration, certification, and revenue transparency. Industry experts said that as passive viewing slows, interactive extensions (for products, features, etc.) are becoming a core monetisation and engagement lever.
Between 2005 and 2024, gaming startups in India raised over $3.7 billion from private equity and venture capital firms, according to Venture Intelligence. Most of this went into RMG ventures.
Legal and regulatory turbulence
In November, the enforcement directorate (ED) arrested Winzo’s founders on money laundering charges, alleging retention of Rs 43 crore in player funds despite the RMG ban, underscoring the risk of non-compliance.
ETtech Explainer: Winzo founders' arrests, centre’s fraud charges a moment of reckoning for Indian gaming
Also Read: ED widens net globally against online gaming
Demand for talent
The industry’s rapid growth is fuelling demand for creative and technical talent: game developers, narrative designers, animators, QA analysts, and more. India currently has 50,000–60,000 open positions, according to the staffing firm TeamLease Digital, across junior and senior roles.
Experts stressed the need to build a stronger talent pipeline through education and Centres of Excellence, in order to build indigenous IP.
AI: boon or bane?
Industry executives said that the rise of AI is democratising game development, making it easier for new and smaller developers to build high-quality games.
At the same time, it is starting to play a key role in reducing development timelines and production costs. Studios are beginning to integrate AI tools to create smarter non-player characters (NPCs), and generate realistic and dynamic game environments.
However, experts also cautioned that while AI can significantly reduce development time, the resulting surge in content may outpace user demand.
Looking ahead
Executives highlight that fiscal incentives, employment subsidies, and infrastructure support could accelerate growth of the gaming sector. While India ranks second in downloads, the average revenue per user (ARPU) remains low at $3.03, signalling that there’s room for improvement as incomes rise.
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