As 2025 ended, India’s video games industry stood resilient amid turbulence, boasting a massive user base and ambitious growth trajectory despite a seismic regulatory shock. With approximately 517-600 million gamers – over 90% of which are mobile-first, the sector’s market size hovers around USD 4.38 billion this year.
Online gaming revenues had remained largely flat in 2024 due to GST hikes but are rebounding in 2025 at a projected 10.8% CAGR, fuelled by cheap data, 5G rollout, and varied content.
The October real-money gaming (RMG) ban, enacted via the Promotion and Regulation of Online Gaming Act, triggered mass layoffs and shutdowns at giants like Dream11, WinZO, MPL, and Gameskraft, erasing over $840 million in assets and displacing thousands. Yet, from these ashes rises a pivot to sustainable models: esports, casual games, and skill-based titles, backed by state policies and global investments.
A Turbulent Yet Transformative 2025
India’s gaming ecosystem, the world’s second-largest by users, grappled with RMG’s fallout, which once dominated 50-83% of revenues (INR 16,000 crore in 2023). The ban, challenged in courts with hearings delayed to January 2026, stemmed from anti-gambling concerns but distinguished “real games” from betting, legitimizing esports at events like Khelo India 2025.
Casual and esports segments grew 20% and 5% respectively in 2024, with esports seeing 2 million tournament participants, 36 pro teams, and 7,400 broadcast hours.
Mobile reigned supreme (55.88% share), with 8.45 billion downloads in 2024, led by battle-royale (BGMI’s return boosted engagement) and hyper-casual genres.
In-app purchases (41% revenue) and ads thrived via UPI micro-transactions.
Indies and mid-core titles gained traction, with studios like Nodwin and global backers (Krafton, Bitkraft) funding early-stage ventures led by ex-RMG talent.
PC/console niches expanded modestly, supported by esports infrastructure.
Government momentum accelerated via AVGC-XR (Animation, VFX, Gaming, Comics, XR) policies.
Maharashtra’s 2025 policy targets Rs 65,000 crore sector value (25% national share), Rs 50,000 crore investments, and 500,000 jobs through incentives for IP, exports, parks, and skilling in Mumbai-Pune hubs.
Karnataka and others followed, positioning India as a “gaming back-office” exporter ($3.75B annually by 2028).
Dominant Trends Reshaping Play
Mobile-First Explosion: 560M+ smartphones and 5G (980M subs by 2030) drive vernacular hits, with female gamers rising at 15.8% CAGR.
Esports Ascendancy: From INR 67 crore (2023) to INR 179 crore by 2028 (21.8% CAGR), fueled by corporate leagues and non-metro traction.
Cloud and Emerging Tech: 5G enables low-latency streaming; cloud gaming to double by 2027.
Resilience: Small teams thrive amid franchise fatigue, though publishing gaps persist.
Challenges linger: illegal offshore apps siphon users, high acquisition costs stifle devs, and RMG’s 28% GST lingers as a cautionary tale.
Outlook for 2026-2028
Explosive Rebound
Gamers could hit 724M by 2028 December.
Projections paint a bullish picture, with the market doubling to USD 8.74B by 2030 (14.8% CAGR) or INR 39,583 crore for online/esports by 2028 (19.2% CAGR).
Lumikai forecasts $9.2B by 2029, driven by in-app purchases and casual/social gaming (INR 36,600 crore by 2028).
Watch out For
Cloud/subscription surges (25% CAGR), global acquisitions of Indian studios, esports mainstreaming (to $120M by 2030), and AI/XR integrations via AVGC hubs.
Exports and job creation (30L direct by 2030) will amplify via policies.
In Conclusion
2025 tested India’s gaming sector’s mettle, purging RMG excesses while catalysing a “real games” renaissance. With 20% of global gamers but just 1% revenue, the next 2-3 years beckon a $7-9B powerhouse – blending mobile might, esports energy, and policy propulsion. Stakeholders eyeing sustainable IP, cloud innovation, and global tie-ups will lead this charge.