420 mn gamers, just $3 ARPU: Why India’s gaming industry is set to soar after RMG ban

 After the ban on money gaming platforms, India’s online gaming industry, which primarily comprises esports and casual gaming, is set to witness an increase in market share as the gaming market leapfrogs from a volume-driven market to a value-driven gaming industry, according to a latest report ‘India’s Gaming Inflection: Non-RMG at Scale’ by Lightbox, a Mumbai-based consumer-tech VC fund.

The Lightbox report, which comes close on the heels of the government’s new law, which banned all types of money-based gaming in India, outlines how the country is set to emerge as one of the most significant gaming markets globally. 

India’s gaming industry, which comprises nearly 420 million players, it’s one of the world’s largest markets. Yet, it is a paradox, among the highest in downloads but trailing in monetisation. The banning of the RMG presents an opportunity to turn this paradox into the greatest potential, says the report.

“Indian Gaming is no longer a question of scale. Multi-faceted value creation is in progress. India can leap frog from volume driven market to value driven gaming giant. With policy clarifications, India's young, mobile-first and multi-lingual gamers, emerging monetisation avenues through in-app purchases, subscriptions and ads, the opportunity is huge,” says Sandeep Murthy, Managing Partner, Lightbox. 

The Lightbox study with leading game and e-sports content platform Rooter reveals that almost three-quarters of gamers are already spending in non-RMG, both short and long session cohorts, with over 30% spending ₹1,000 per month. “If provided with the right value, content, and community, Indian gamers will pay. We firmly believe that India can shift from being a volume story to a value story, fuelled by culturally relevant, long-lasting, and monetisable gaming experiences,” says Murthy.

The global gaming market is estimated at $177.9 billion in 2024, which is projected to reach $198 billion by 2027. Over 3.42 billion people play games worldwide. China, India, and the U.S. are the largest markets; however, in terms of ARPUs, the US leads with $215, China at $68, and India at just $3.03, which underscores the headroom for growth.

India had the largest gamer base after China in 2024, around 110 million daily gamers, growing at a 5-6% CAGR. The Promotion and Regulation of Online Gaming Act, 2025, banned real-money games (RMG), outlawed their advertising and financial rails, and introduced strict penalties. This crystallised the regulatory risk around RMG while giving non-RMG games clear tailwinds and legitimacy. Before the new law, RMG accounted for 83-86% of total revenues in the Indian gaming market. Non-RMG, which includes casual, mid-core, esports, and community-driven titles, now represents the fastest-growing opportunity.

Non-RMG games monetise through in-app purchases, advertising, subscriptions, and hybrid models. The FICCI-EY report projects that in-app purchases in India will grow at a 20% CAGR. Advertising revenue in the Indian gaming sector grew 10% in 2024, with casual and hyper-casual games providing platforms for brands to engage younger audiences across Tier I–III cities. Esports revenue in India stood at US$100 million in 2024, with sponsorships contributing 61%. 

For platforms and investors recalibrating after the RMG ban, the Lightbox report outlines a clear playbook. UPI-friendly off-store payments for ₹10–₹99 top-ups and ₹99–₹129 passes; disciplined live-service cadence (events, drops, progression); hybrid  monetisation that combines small IAP with rewarded ads; and cross-device expansion to capture  higher-value users

What are multiple growth drivers for India’s non-RMG sector?

• Hyper-localisation and culturally resonant content: Approximately 75% of Indian users prefer Hindi or other regional languages 

• Game-Based Learning (GBL): Valued at $873.3 million in 2024, projected to reach $5.39 billion by 2033 

• Cloud Gaming: Estimated at $9.98 million in 2024, projected to grow to $1.3 billion by 2030 

• Artificial Intelligence: Used to generate hyper-local narratives, optimise monetisation, and enhance personalised gameplay.

What are Rooter's key insights in Lightbox’s report?  

• 74.9% of respondents spend on non-RMG in-app purchases; 31.2% spend ₹1,000+ per month. 

• Spending is not limited to heavy players. Both those who play over two hours daily and those who play under 30 minutes reported spending more than ₹1,000 monthly.

• Popular spend categories include battle passes and subscriptions (40%), cosmetics (37%), and unlockable content (23%).

• Language preferences: Hindi-first (34%), followed by Tamil and Telugu, with over 45% of Indian gamers preferring regional language content. 

• 12% of the respondents find in-game ads ‘annoying’ while 38% said they would stop playing if the ad load is excessive, signalling a hybrid monetisation model for revenue generation.

• 52.4% report that their playtime has  increased over the past five years.