The $3.8-billion domestic gaming industry is bracing for a reset as real money gaming (RMG)—once the dominant revenue driver—recedes into the background. With the Promotion and Regulation of Online Gaming Act, 2025, imposing a blanket ban on RMG, developers and investors are moving quickly to tap non-RMG segments such as casual titles, mid-core games and esports, where early signs point to sustained growth.
From RMG dependence to in-app purchase boom
Although India has one of the world’s largest gamer bases at over 400 million, monetisation has long been its weak spot. Average revenue per user (Arpu) is just $3.03, compared with $68 in China and $215 in the US. The gap, however, could begin to close. A report by venture capital firm Lightbox and gaming commerce platform Rooter has highlighted that three in four gamers already spend on in-app purchases in non-RMG titles, with annual revenues from in-app purchases soaring from $100 million in 2020 to nearly $1 billion in 2024.
This shift is being led by blockbuster mobile titles such as Battlegrounds Mobile India (BGMI), Free Fire, Call of Duty: Mobile and Clash of Clans, which have normalised micro-transactions through battle passes, cosmetic upgrades and feature unlocks.
“On our Rooter Shop, where we sell in-app currency, we see an average spend of about $30 a month, which is almost about Rs 2,400,” Piyush Kumar, founder and CEO of Rooter, said.
Mobile backbone and the significant ‘paying gamer’ base
Mobile will remain the backbone of the domestic market, accounting for 80% of revenues and clocking 8.45 billion downloads in FY25, more than twice Indonesia, the next largest market. The gamer base is young and male-dominated, with 77% between 18 and 34 years of age, offering publishers a long runway for engagement.
Despite the overall low average spends, the report has estimated that 60-75 million mid-core and hardcore players are already spending significantly above the national Arpu. Around 31% of paying gamers put in more than Rs 1,000 each month, with purchases skewing toward battle passes (40%), cosmetic upgrades (37%) and new features (23%).
Cheap mobile data, penetration of smartphones at around 560 million, and the seamlessness of UPI, which enables 90% of micro-transactions, are accelerating this transition.
According to Sandeep Murthy, partner and managing director at Lightbox, as the ecosystem will deepen, the country will enter a cycle where more content will drive adoption, which in turn will push monetisation and attract further capital inflows.