Summary of this article
India’s gaming industry is witnessing a decisive pivot from real-money gaming to non-RMG formats in the wake of regulatory changes. According to Lightbox’s India’s Gaming Inflection: Non-RMG at Scale, nearly 75 per cent of gamers spend on in-app purchases, with over 30 per cent paying more than Rs 1,000 a month. The report highlights longer playtimes, rising esports revenue, and the growing role of hyper-localised content.
India’s gaming ecosystem is in the middle of a reset. For years, the industry’s fortunes were tied to real-money gaming (RMG), which at its peak made up more than 80 per cent of sector revenues. That balance, however, has now completely shifted.
A new report by venture capital firm Lightbox, India’s Gaming Inflection: Non-RMG at Scale, finds that non-RMG formats are emerging as the dominant force, supported by regulatory clarity, changing consumer behaviour, and new monetisation models.
India today counts nearly 420 million gamers, making it the world’s second-largest base after China. But while downloads surged in recent years, revenue generation lagged. RMG once filled that gap, but the Promotion and Regulation of Online Gaming Act, 2025, banned all money-based play, advertising, and financial transactions.
This created an opening for non-RMG titles to thrive, including casual, mid-core, esports, and community-driven games that now enjoy both legitimacy and tailwinds.
Lightbox’s poll, conducted with Rooter, a game streaming platform, shows a striking new trend:
74.9 per cent of gamers now spend on non-RMG in-app purchases.
31.2 per cent spend over Rs 1,000 per month.
Spending cuts across both light players (under 30 minutes daily) and heavy users (2+ hours daily).
As per the findings, some popular in-game purchases include:
Battle passes (40 per cent)
Cosmetics (37 per cent)
Unlockable content (23 per cent)
The shift reflects a new willingness to pay for digital value, even without the lure of cash prizes.
Sandeep Murthy, Managing Partner at Lightbox, notes, “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.”
Rising playtime, growing monetisation
More than half of the surveyed gamers said their overall playtime has increased in the past five years. Monetisation too is keeping pace. Non-RMG revenue streams such as advertising, subscriptions, and in-app purchases are projected to expand rapidly.
The FICCI-EY report cited in the report estimates in-app purchases alone will grow at 20 per cent CAGR, while esports crossed the $100 million revenue mark in 2024, with 61 per cent coming from sponsorships.
Regional preferences are also at play here:
Over 45 per cent of gamers now prefer Hindi (34 per cent) or regional-first content like Tamil, and Telugu. Such hyper localisation in gaming is becoming a cornerstone of game design and community building among the players.
Globally, the industry is now looking to grow to $198 billion by 2027 from $177.9 billion in 2024. The average revenue per user (APRU) in India is currently just $3.03, compared to $68 in China and $215 in the US, the report notes, pointing at a bigger headroom for growth in the country.
What are the industry's future growth drivers?
Beyond casual play. The report notes down some emerging segments which could potentially anchor the next wave of growth of gaming in India:
Game-based learning: Valued at $873.3 million in 2024, projected to reach $5.39 billion by 2033.
Cloud gaming: Expected to grow from $9.98 million in 2024 to $1.3 billion by 2030.
AI-enabled personalisation: Tools for gameplay optimisation, monetisation, and narrative design.
New (and more convenient) models of transactions like UPI-friendly microtransactions (Rs 10 to Rs 129 passes), hybrid monetisation, and disciplined live-service updates are also shaping the domestic market.
A safer reset after the ban
The Online Gaming Act has altered incentives across the industry. Under the law, offering or facilitating RMG attracts penalties of up to three years’ imprisonment and Rs 1 crore fine, with unlawful advertising punishable by up to two years or Rs 50 lakh fine. Offences are cognisable and non-bailable, with CERT-IN empowered to block violating apps. Importantly, individual players face no penalties.
This regulatory reset has shifted focus squarely toward sustainable formats. As the report’s findings suggest, the appetite for gaming is stronger than ever, only now it is being channeled into models that don’t carry financial ruin for players.
