RMG ban shrinks India’s gaming industry from $6 bn to $1 bn; PUBG, Free Fire emerge as dominant players

India’s gaming industry has undergone a sharp structural reset following the August 2025 ban on real-money gaming (RMG), with the sector shrinking nearly 80% from an estimated $6 billion market to around $1 billion, according to a latest report by ICICI Securities.

The report, titled “Decoding New-Age Tech in India”, said the industry’s earlier growth was overwhelmingly driven by RMG platforms such as fantasy sports, rummy and poker. However, after the regulatory crackdown, the market has pivoted sharply toward eSports, free-to-play gaming and alternative monetisation models such as in-app purchases (IAP), advertising, audio chat rooms and short-form gaming content.

“A significant portion of former RMG demand appears to have moved offshore via crypto routes,” the brokerage said in its report.

Post-RMG ban market structure

Before the ban, RMG accounted for nearly 88-90% of the sector’s total revenue. Companies such as Dream11, Games24x7, Zupee and WinZO formed the backbone of the ecosystem, with the category growing nearly 30% year-on-year. The report estimates the RMG market expanded from ₹33,000-35,000 crore in FY24 to ₹44,000-45,000 crore in FY25 before the ban disrupted the segment.

Post-ban, the gaming ecosystem has become significantly smaller and more concentrated. According to the report, nearly 70-80% of the current ₹10,000 crore market is now controlled by just two or three large players, led by Krafton’s PUBG/BGMI and Garena’s Free Fire.

“The current ₹10,000 crore market is highly concentrated, with 70-80% of revenue generated by two to three players,” the report noted.

PUBG/BGMI alone is estimated to generate ₹2,000-2,500 crore annually from India, supported by nearly 6 million daily active users and over 21 million monthly active users. The title derives around 80% of its revenue from in-app purchases and the remaining from advertising. Free Fire commands even larger user numbers, with daily active users estimated at 8 million and monthly users crossing 70 million, although its monetisation remains weaker than PUBG.

As per the report, eSports has emerged as the fastest-growing compliant segment within the industry, clocking growth of nearly 20% annually. NODWIN Gaming has become one of the biggest beneficiaries of this shift, generating ₹500-600 crore annually through tournament organisation, sponsorships, broadcasting rights and ticketing linked to PUBG and Free Fire competitions.

Meanwhile, casual gaming continues to remain relevant, though monetisation challenges persist. Ludo King, for instance, generates an estimated ₹250 crore annually despite strong engagement levels, highlighting the gap between scale and revenue conversion in India’s gaming ecosystem.

Monetisation models remain structurally weaker

The report highlighted that post-ban monetisation models remain structurally weaker compared with the earlier RMG-led ecosystem. The revenue mix is estimated at nearly 80% in-app purchases (IAP) and 20% advertising.

Advertising yields in India remain low, while users are willing to spend meaningfully only in games where purchases provide competitive advantages or social signalling value, such as premium weapons, skins or progression features in shooter games, it added.

The report also noted that India’s IAP ecosystem remains highly concentrated, with competitive shooter games such as PUBG Mobile and Free Fire accounting for disproportionately higher monetisation compared with other gaming categories.

Former RMG operators such as Dream11 and Zupee are now experimenting with free-to-play tournaments, subscriptions, audio rooms and micro-drama content to rebuild revenue streams. However, the brokerage cautioned that many of these models remain early-stage or could face future regulatory scrutiny, particularly formats involving frequent UPI-based auto-renewals.

The report also pointed to a significant unintended consequence of the RMG ban — the migration of a portion of gaming demand to offshore and crypto-linked platforms. Additionally, the government is estimated to have lost nearly ₹25,000 crore in annual tax revenues after the ban.

Looking ahead, the future of India’s gaming sector is likely to depend heavily on regulatory clarity around eSports and skill-based gaming. The report said upcoming eSports guidelines could define permissible tournament structures, prize money rules and monetisation avenues such as sponsorships and media rights.

At the same time, the industry continues to lobby for the possible return of skill-based RMG formats under stricter safeguards, including mandatory KYC norms, spending limits and tighter transaction monitoring mechanisms. According to the report, any calibrated reopening of the segment could materially alter the industry’s growth trajectory once again.