India’s Gaming Industry Pivots to Sustainable Growth Model

India’s gaming sector is undergoing a fundamental transformation as 420 million players navigate the aftermath of the government’s 2025 ban on real-money gaming (RMG). According to Lightbox’s latest report, the industry is shifting from a scale-focused approach to sustainable monetization strategies, despite average revenue per user remaining at just $3—significantly below the U.S. ($215) and China ($68).

New Revenue Streams Emerge

The post-ban landscape is opening opportunities in non-RMG monetization. A survey conducted with streaming platform Rooter reveals that nearly 75% of Indian gamers already spend on in-game purchases, with 31% investing over Rs 1,000 monthly. Battle passes account for 40% of spending, followed by cosmetics (37%) and unlockable content (23%).

Localization Key to Market Penetration

Language preferences are reshaping development strategies, with 45% of gamers favoring Hindi or regional languages over English. However, monetization requires careful balance—38% of respondents indicated they would abandon games overloaded with advertisements, signaling the need for user-centric approaches.

With 110 million daily active players and 5-6% annual growth, India is positioned to become a major contributor to the global gaming market, projected to reach $198 billion by 2027. Before the RMG ban, such games generated over 80% of industry revenues. Future growth is expected from hyper-localized titles, AI-driven personalization, cloud gaming, and esports—already a $100 million segment with 61% revenue from sponsorships.

“India can now shift from being a scale-driven market to one built on culturally relevant, monetizable gaming experiences,” said Sandeep Murthy, Managing Partner at Lightbox.