INDIA PLAYS. THE WORLD CASHES IN. India’s gaming boom—and the battle to build global hits of its own

 

BIZ MASALA  |  FORENSIC BUSINESS FEATURE

INDIA PLAYS. THE WORLD CASHES IN.

India’s gaming boom—and the battle to build global hits of its own

By Murthy ASR  |  Biz Masala  |  Final Forensic Edition — 9 October 2026

 

THE DOWNLOAD TRAP

A multi-screen workstation illustrates the analytical and technical work behind digital products. This is an illustrative image, not a verified game studio.

India’s gaming market has an extraordinary top-of-funnel advantage: hundreds of millions of players, low-cost mobile data, inexpensive smartphones and a vast cultural library of stories, characters and competitive formats. Sensor Tower estimated 8.45 billion mobile-game downloads in India in FY2024–25, making India the world’s largest market by downloads. Yet downloads are not the same as revenue, and neither is the same as ownership of a globally enduring franchise.

Lumikai’s State of India Interactive Media Report 2025 estimated India’s gaming market at more than US$1.5 billion, with 555 million gamers and 25% payer conversion. Sensor Tower separately estimated in-app purchase revenue at around US$400 million for FY2024–25, excluding advertising and certain alternative payment channels. The numbers describe different market scopes; they should not be forced into a single neat total.

The central question is not whether India has produced original games. It has. Raji: An Ancient Epic, Ludo King, Indus and other home-grown properties demonstrate creative capability. The harder question is why India has not yet produced a deep bench of globally recognised, repeatable franchises with the scale, lifecycle management and cross-platform reach of the world’s leading game IPs.

Chart 1. Downloads and direct in-app purchase revenue use different units and are shown to illustrate the monetisation gap, not as a ratio.

THE METRIC THAT MISLEADS: DOWNLOADS

A purpose-built gaming setup illustrates the consumer hardware and environment around gaming. It is not evidence of market size or spending.

A download is an acquisition event, not a paying customer. It may be a first install, a reinstall, a user who leaves after minutes, or a player who engages for months. A market can dominate downloads because distribution is cheap and users are numerous while still capturing only a modest share of global game spending.

India’s economics favour free-to-play design, advertising, low-cost live operations and social or competitive play. Those are not inherently inferior models. But a studio seeking to fund premium art, narrative design, server infrastructure, global user acquisition and years of updates must solve a more difficult equation: retain a smaller cohort of high-value users, monetise without damaging the experience, and acquire new players at a cost below their lifetime contribution.

THE FOUR STRUCTURAL FRICTIONS

1. Monetisation: a large audience is not a large wallet

Low willingness to pay can constrain a locally focused premium or mid-core game, but the blanket claim that Indian casual-game ARPU is only US$2–3 while the US or Japan delivers US$25–35 is not used here: ARPU varies by genre, platform, cohort, advertising inclusion, payer definition and time period. A publishable comparison requires a like-for-like dataset.

The strategic implication is clearer than the headline comparison: a studio cannot rely on population alone. It needs a deliberate mix of advertising, in-app purchases, subscriptions, licensing, merchandising, platform deals or global-market sales. Each changes game design and the kind of IP the studio can afford to build.

2. Capital allocation: real-money gaming changed the incentives

Before the 2025 regulatory reset, real-money gaming and fantasy sports attracted substantial investor capital because their transaction-led models could monetise users quickly. Inc42’s 2026 compilation, drawing on Datalabs, estimates that Indian gaming startups raised more than US$4 billion cumulatively and that real-money gaming absorbed over US$3 billion of it. These are rounded secondary-source estimates—not evidence that more than 80% of all Indian venture capital went to RMG.

Chart 2. Rounded cumulative estimates from a secondary compilation; not annual funding or a census of every investment.

The policy shock matters. India enacted the Promotion and Regulation of Online Gaming Act in August 2025, and the government announced rules effective 1 May 2026. The framework prohibits online money games while creating pathways for esports and online social games. That has altered the landscape for RMG operators and investors. It does not automatically redirect former RMG capital into original game studios: investors may wait, exit, move to other sectors or demand evidence of a different business model.

3. The services advantage—and the ownership gap

Code on multiple displays illustrates the engineering side of game development; it does not identify a particular company or title.

Indian teams have built expertise in engineering, art production, animation, testing, live operations and co-development for international publishers. Service work can create jobs, export revenue and deep technical competence. It does not necessarily create a studio’s own franchise, audience relationship, sequel rights or long-term royalty stream.

The economic distinction is between being paid to build an asset and owning the asset. IP ownership requires a studio to finance discovery and prototyping, manage creative direction, secure publishing and distribution, build community, operate a live game, analyse player behaviour and support a title long after launch. Those capabilities are different from the ability to deliver a production milestone for a client.

4. Cultural ambition is not a substitute for product craft

A multi-monitor workstation illustrates the production tools used across game development and digital content work.

India’s epics, folklore, regional histories, sports and contemporary urban life offer a vast source of narrative material. But cultural identity is not a business model. A mythology-based game still needs excellent controls, pacing, visual clarity, onboarding, localisation, performance on target devices, fair monetisation and reasons to return.

The comparison with international hits should therefore not be reduced to ‘India has stories, but has not used them’. The tougher test is whether studios can convert distinctive material into a polished interactive system that feels compelling to players who do not already know the source culture.

THE IP QUESTION: A BETTER WAY TO MEASURE SUCCESS

Digital concept art on a display illustrates character and world-building work. The depicted artwork is not presented as an Indian game or named IP.

The phrase ‘India has no globally recognised IP’ is too absolute and hides several different outcomes. A game can be locally popular without becoming a global franchise; a studio can own an original IP but lack global distribution; a game can earn internationally without becoming a durable brand; and a service studio can be world-class without owning any consumer-facing title.

Forensic assessment should track at least five measures: (1) share of revenue earned outside India; (2) repeat engagement and retention after launch; (3) sequel, licensing and merchandising revenue; (4) ownership of the underlying IP and publishing rights; and (5) whether a studio can finance a second and third title without depending entirely on one hit or client.

Business model	What it can build	What it may not own
Outsourced development / co-development	Skills, export revenue, production discipline	Consumer brand, sequel rights, end-user relationship—unless contractually retained
Advertising-led casual games	Large reach, repeat play, ad inventory	High per-user revenue; premium production budget at scale
Premium / mid-core original IP	Brand, player community, franchise potential	Predictable cash flow; global distribution without publisher or marketing muscle
Real-money gaming (historical model)	Fast transaction monetisation where lawful	A durable path under India’s changed legal framework; not a proxy for entertainment IP

WHAT THE TURNING POINT ACTUALLY REQUIRES

Global-first, not India-blind

A character sketch on a digital tablet illustrates early-stage visual development, where an original game world begins taking shape.

Designing for international markets does not mean erasing Indian identity. It means testing the game early with different audiences, choosing a genre with global demand, planning localisation and accessibility, and modelling acquisition cost, retention and monetisation before committing to a multi-year build.

Patient capital with milestones

A game studio needs capital for prototypes, user tests, vertical slices, production and live operations. Funding should be staged against evidence: retention cohorts, repeat play, payer conversion, cost per acquired user, organic discovery, and production velocity. ‘Patient capital’ should not mean unaccountable spending; it should mean accepting that creative products require experiments before reliable forecasts exist.

Publishers and distribution are part of the product

A good game can fail because no one discovers it. Indian studios need publishing partnerships, community management, influencer strategy, platform relationships, localisation, player support and post-launch operations. Distribution capability should be built alongside the game—not after the development budget is exhausted.

Build a portfolio, not a national mascot

The goal should not be to force one ‘Indian answer’ to Candy Crush or PUBG. It should be to create a repeatable ecosystem capable of producing different kinds of hits: casual puzzle games, strategy, narrative adventures, sports, co-op titles, PC/console games and culturally rooted franchises. A portfolio spreads creative and commercial risk.

THE POLICY RESET: WHAT COMES NEXT?

The online-money-gaming prohibition may reduce exposure to certain forms of financial harm, but it also creates disruption for companies, employees and investors whose models depended on paid-entry games. It would be premature to assume that this capital and talent will automatically flow into esports, casual games or original IP. Those segments have different economics, timelines and skill requirements.

Policy support is most useful when it improves the foundations of creation: access to seed and prototype finance, predictable classification and compliance, IP protection, international market access, skills in game design and production, and transparent support for esports and social games. The goal should be a healthy entertainment ecosystem, not a return to monetisation models that depend on users risking money.

THE BIZ MASALA THESIS

India has created original games. The bigger challenge is turning its enormous audience and technical talent into a repeatable pipeline of globally durable, Indian-owned franchises—and ensuring Indian creators capture more of the value.

The gap lies between access and ownership: between getting a game onto millions of phones and building a world players return to; between executing a client’s production plan and owning a character, community and sequel; between raising money for user transactions and financing uncertain creative discovery.

The next Indian gaming champion will not be created by downloads alone, by mythology alone, or by a funding announcement. It will emerge when a studio combines creative direction, product discipline, capital matched to risk, global distribution and long-term ownership of the IP. The measure of success is not simply how many Indians play games. It is how many enduring game worlds Indian teams create—and own.

EVIDENCE NOTES: WHAT WE CAN AND CANNOT CLAIM

·       8.45 billion downloads: Sensor Tower estimate for India mobile games in FY2024–25; platform coverage and download methodology matter.

·       US$400 million IAP revenue: Sensor Tower estimate for App Store and Google Play in FY2024–25; excludes advertising and some alternative/direct payment channels.

·       US$1.5 billion gaming market, 555 million gamers, 25% payer conversion: Lumikai State of India Interactive Media Report 2025; market definition differs from Sensor Tower’s IAP-only measure.

·       US$4 billion+ cumulative funding and US$3 billion+ RMG funding: Inc42 2026 list citing Datalabs; rounded secondary-source estimates, not audited totals.

·       28% GST on full face value of bets: historical policy change from October 2023. Do not present it as the current complete legal framework; the 2025 Act and 2026 rules materially changed online-money-gaming regulation.

·       Do not claim that India has no original IPs, that all Indian gamers refuse to pay, or that a specific percentage of all VC went to RMG without a defined dataset and period.

SOURCES AND FURTHER READING

·       Sensor Tower, India Mobile Game Insights 2025 (8.45bn downloads; IAP estimates) — https://sensortower.com/blog/india-mobile-game-insights-2025

·       Lumikai, State of India Interactive Media Report 2025 (market, gamers, payer conversion) — https://www.lumikai.com/post/india-s-interactive-media-economy-state-of-interactive-media-report-2025

·       Inc42, Top 30 Funded Gaming Startups in India 2026 (Datalabs-based funding compilation) — https://inc42.com/lists/top-30-funded-gaming-startups-in-india-2026/

·       MeitY / PIB, Promotion and Regulation of Online Gaming Rules, 2026 (22 April 2026) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2254606&lang=1&reg=3

·       IBEF, Indian game studios level up with local IPs and cultural narratives (24 June 2025) — https://www.ibef.org/news/indian-game-studios-level-up-with-local-ips-and-cultural-narratives

·       Dentsu, India Gaming Report 2025 — https://prod-dentsu-website-afd-ep-dcdpenekezfnd0hn.a02.azurefd.net/in/en/reports/india_gaming_report_2025

·       EY, A studio called India: Content and media services for the world (2025) — https://www.ey.com/content/dam/ey-unified-site/ey-com/en-in/pdf/2025/ey-a-studio-called-india-content-and-media-services-for-the-world.pdf

·       GST Council, 50th and 52nd meetings: online gaming GST policy documents — https://www.gstcouncil.gov.in/node/4974

·       Press Information Bureau, Indian gaming and indigenous IP creation — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2191085

VISUAL RIGHTS & EDITORIAL NOTE

The hero graphic and charts in this document were created specifically for this feature. The six photographs/illustrations inserted into the visual edition were supplied by the author and are used illustratively; they do not identify a verified Indian game studio, named game, or documented production process. Images with obvious stock-site watermarks or creator overlays were excluded. User-supplied does not automatically mean copyright-cleared: confirm publication rights and provenance for every photograph/illustration before public release. The feature is an independent analysis and does not endorse any gaming company or investment.

 

BIZ MASALA

Business. Economics. The story behind the numbers.

Murthy ASR  |  Independent analysis