India’s RMG exodus is fuelling a new gaming wave

The shake-up in India’s gaming sector may be creating more opportunity than disruption. According to Salone Sehgal, founder and managing partner at Lumikai, the decline of real-money gaming (RMG) has opened up space for innovation and deeper consumer engagement across midcore and casual gaming.

“Last year, we had already seen that nearly 66% of users paying for real-money games were also paying for midcore games. Now, with RMG out, that migration is clear,” Sehgal said, discussing Lumikai’s Swipe Before Type 2025 report. “We’re seeing about a 33% conversion rate of users saying they’re actually making payments in games, with the top titles being midcore ones like Free Fire, BGMI, Clash of Clans and Coin Master. That thesis is now playing out.”

She added that around 40% of users are paying for midcore games, while 20% pay for casual titles. “There’s a lot more depth to the Indian consumer beyond RMG than was previously thought,” she said. “And now, with RMG out, developers are finally building for what the audience is actually consuming.”

Post-RMG, a talent and capital reallocation

Sehgal believes the RMG ban has triggered a healthy churn. “Earlier, a lot of investor capital and talent was concentrated in real-money gaming. That’s changed. Now, many product managers, tech and live-ops talent from RMG platforms are moving into building interactive media platforms and games,” she said.

Lumikai itself has backed three startups founded by former RMG professionals in the last six months. “Once you see more builders, you’ll see more capital following them, and that’s what’s happening now,” she said.

From an investor standpoint, Sehgal said Lumikai had always steered clear of RMG because “the financial reward was asymmetric to the social risk.” The fund, instead, focused on midcore games and original IP creation. “As an institutional platform, we invest for the next decade, not the next two years. Long-term patient capital remains undeterred by short-term shocks,” she said.

Consumers are redefining digital media

The Swipe Before Type 2025 report — based on a survey of over 2,200 smartphone users across India — paints a detailed picture of the country’s interactive media ecosystem. Sehgal said it challenges long-held assumptions that Indians only pay for “astrology, Bollywood and cricket.”

“What we’ve unearthed is that Indians are now paying for what we call the A-to-G of digital consumption—Astrology, Bollywood, Cricket, Dating/Devotion, Education, Fandom, and Gaming,” she said.

The report shows that 46% of interactive media users are women, two-thirds are from non-metro regions, and 80% use more than 1GB of mobile data daily. Nearly 40% maintain three or more active subscriptions, while 80% use UPI for payments.

Interestingly, games command nearly 70% of users’ wallet share for ticket sizes above ₹1,000, while video and social dominate the ₹200–₹500 range. Audio, though growing in adoption, remains a low-ARPU category. “India’s payments infrastructure has gotten a massive flip through UPI,” Sehgal noted. “It’s made microtransactions, from ₹1 to ₹10,000, effortless, unlocking monetisation potential across categories.”

Beyond gaming

Sehgal highlighted microdramas and anime as emerging formats reshaping consumption. “Snackable, short-form storytelling is becoming mainstream. You won’t start an episode on Prime Video for five-ten minutes, you’ll watch a microdrama instead,” she said.

She also pointed to AI integration, live social entertainment, and spiritual-tech as new frontiers. “There are certain trends in India like Astro-tech and live social entertainment that don’t exist anywhere else. These are not fringe behaviours anymore.”

India’s interactive media sector, valued at $12 billion today, could grow to $30 billion in five years, expanding at a 16–18% CAGR. “We’re still in the early innings. A mature ecosystem is one like China’s with billion-dollar gaming and media businesses. India isn’t there yet, but the trajectory is clear,” she said.

“The next decade,” Sehgal concluded, “will look nothing like the last.”