Inside India's Multi-billion Dollar Gaming Boom: Dreams, Data, and Disruption Fuel a Digital Revolution

1 A.M. Nakul Sharma is prepping for the most anticipated BGMI match he’s been waiting to play for over a year. For the 16-year-old, it’s not just another game. It’s his gateway to becoming India’s next digital sports star. Elsewhere, Anand Kushwaha, a daily wage labourer from Bihar’s Chapra district, had almost given up on life. But thanks to affordable Internet and a fascination for fantasy sports, Anand’s fortunes flipped overnight. He won ₹1 crore on Dream11. Meanwhile, Ranjitha, 24, had married Darshan Babu, an assistant engineer based in Karnataka’s Chitradurga district, in 2020. Within a year, her life turned into a nightmare. Her husband was hooked to illegal online gambling, lured by local betting gangs on illegal offshore websites. What began as small wins quickly spiralled into massive losses of over ₹1 crore. Harassment from lenders and repeated police visits pushed Ranjitha to the brink; she died by suicide. Three stories, three different emotions, but they encapsulate the full spectrum of India’s gaming revolution. From Tier I metros to small towns, online gaming is no longer just a leisure activity. It has evolved into a sport, a career path, and, in some cases, a financial lifeline. Despite regulatory hurdles and the looming threat of offshore betting platforms, India’s gaming ecosystem remains a positive story, backed by growing government support. The market is on track to hit $3.9 billion in revenue by the end of 2025, $9.2 billion by FY29, and $60 billion by 2034, according to fantasy gaming platform WinZO’s India Gaming Report 2025. The rise of gaming in India From humble gaming cafes in the late 1990s and early 2000s to today’s fantasy leagues, high-stakes e-sports tournaments, and Ludo games with millions at stake, India has come a long way in a short time. The country boasts of 1,888 gaming startups, over 130,000 skilled gaming professionals, and 520 million users, second only to China. It accounts for 20% of the world’s gaming user base and 15.1% of gaming app downloads, according to the WinZO report. Today, India dominates all formats of the gaming market because of the sheer size of its user base. It rules in fantasy sports with the likes of Dream Sports and Nazara Technologies. It is nurturing global e-sports talent across some of the biggest boot camps, while spreading deep into the heartlands riding on the popularity of real-money gaming (RMG) platforms. “India’s gaming ecosystem is evolving at a rapid pace. While our infrastructure and interactive platforms have scaled faster than local gaming IPs, the shift is now beginning,” says Anuj Tandon, partner, India & UAE, BITKRAFT Ventures, a leading early-stage gaming VC. According to Nitish Mittersain, joint MD and CEO of Nazara Technologies — India’s only listed gaming company — unlike mature gaming markets that developed around strong console or PC IPs, India leapfrogged directly into cellphones, bringing with it a wide range of player profiles, monetisation challenges, and consumption patterns. “Rather than betting on a single genre or business model, we opted for a portfolio strategy early on. The rationale was clear: to participate in multiple slices of the value chain and stay adaptable in a fragmented, fast-evolving market.” Piyush, founder & CEO, Rooter, says gaming is booming in India, with gameplay, content, esports, and in-app purchases (IAP) converging. "Indian gamers are spending more time and money, driving 40% YoY growth in the IAP (in-app purchase) market." But where’s the investment? Over the past five years, India’s gaming sector has attracted $3 billion in FDI, the bulk of which has flowed into the pay-to-play and RMG segments. Of the country’s 1,888 gaming companies, only 236 have secured funding, with 70 reaching Series A or higher, 48 Series B or beyond, and 133 Series C. While 100% FDI is permitted through the automatic route in online gaming, stakeholders believe domestic capital is crucial for R&D, IP creation, and hiring competitive talent. Startups, including Nazara, WinZO, and Mobile Premier League (MPL), have drawn interest from marquee investors such as Peak XV, Kalaari Capital, SoftBank, and Tiger Global. Nazara currently commands a P/E multiple north of 100x. Global appetite for Indian gaming and interactive media is also rising. Japanese giants, including Sony and Mixi, and strategic investors such as Krafton, are betting on the country. “India’s economic stability makes it a prime destination for gaming investments,” says Salone Sehgal, founding general partner of Lumikai, an early-stage VC fund focussed on gaming and interactive media. This also aligns with Prime Minister Narendra Modi’s push for the sector. At the recent WAVES event in Mumbai, Modi identified gaming, storytelling, animation, and VFX as “national priorities”. Varun Ganjoo, co-founder and CMO of Baazi Games, says in India’s gaming economy, the winners aren’t just companies — it’s the entire ecosystem. “Skilled players are becoming professionals, influencers are building careers, and the government is collecting ₹1,000 crore-plus monthly in GST just from RMG.” The e-sports revolution Inside a 15,000 sq. ft facility in Kharghar, Navi Mumbai, there’s a four-floor gaming fortress, with streaming cabins, content creation zones, recreation rooms, and even a modern kitchen. It’s not a gaming café, but S8UL’s exclusive multimillion-dollar e-sports boot camp, where India’s top digital athletes are trained for world championships. At the helm is 28-year-old Animesh Agarwal, founder of S8UL, who describes it as “a cricket academy for the digital world”. Running a club like this, he says, costs $1 million annually. “We train top talent, mostly in their 20s, for games like CODM, Valorant, BGMI, and Pokémon Unite.” The effort is paying off. S8UL teams have clinched top titles — the PUBG Mobile India Series (₹36.6 lakh) and the Battlegrounds Mobile India Pro Series (₹82 lakh), to name a few. Others like GodLike Esports, Orangutan Gaming and Skyesports are also pushing professional gaming to a new level. E-sports was officially recognised as an Olympics category in 2024. With the inaugural Olympic Esports Games set to be held in Saudi Arabia in 2025, the stakes are higher than ever, says Agarwal. “It’s the biggest prize pool in any sport ($70 million).” The RMG story The Indian gaming industry has for long struggled with monetisation issues as traditional models of in-app purchases (IAP) and ad revenue failed to succeed. The RMG segment allows a gaming ecosystem, where players win real money in stake-based games. The segment dominates the sector, with over 85.7% revenue share. It grew at a healthy rate of 17.8% during FY24. Companies catering to this category have big plans. Sai Srinivas-led M-League aims to become the “Tencent of India” by tapping into not just the country’s gaming revolution, but also doubling down on global expansion. “India is critical for users (daily active users) who drive future revenue. But we must also compete globally because India isn’t a protected market. We have to be world-class to succeed here,” Srinivas explains. While M-League democratises RMG for India’s masses, Delhi-based Baazi Games dominates the premium segment, going all in on its core offering, poker. Ganjoo says its PokerBaazi platform controls above 70% of India’s real-money poker market through its shorter and faster formats and niche ecosystem. “Poker isn’t just a game. It’s a sport with global ecosystems: playing, analysing, and competing. We built PokerBaazi from scratch in 2014 because India lacked quality platforms. From AI-powered ‘Poker Shots’ analytics to Hotstar-streamed tournaments — we built the sport.” Ganjoo says RMG has historically contributed over 80% of India’s gaming revenue. “India has 700-800 million mobile Internet users, but only 90 million gamers; of them, just 20-22% are RMG users. The percentages may stay stable, but volumes will explode.” Gaming, gambling, and GST While India’s broader interactive media sector has remained largely insulated, RMG, a major revenue driver within the gaming industry, has been directly hit from GST and retrospective taxation issues. The segment grew 17.8% in FY2024, but is now battling regulatory headwinds, which has largly shaken investor confidence and pushed some mid-sized firms to shut down. Until recently, betting and casino games attracted 28% GST, while skill-based games were taxed at 18%. It changed when GST authorities issued show-cause notices, arguing that even skill games with monetary stakes qualify as betting, thereby attracting the steep 28% rate. The government applied this retroactively, from August 2017 to October 1, 2023, across all games involving stakes, regardless of whether they were skillor chance-based. Over 75 companies are currently facing a retrospective tax demand of around ₹1.5 lakh crore “The implementation of 28% GST completely changed our product roadmap and business approach. Since then, we have focused heavily on execution excellence, hunting inefficiencies, and plugging even micro-gaps in our operations. When faced with such a significant tax burden, there's no room for waste. Every aspect of the business needs optimisation,” says Dilsher Singh Malhi, Founder & CEO of Delhi-based company Zupee, which led Fortune India's list of startups in e-gaming in April 2025 issue. Legal experts argue this classification collapses India’s judicially upheld distinction between skill and chance. “The 28% GST on online money gaming equates games of skill with gambling, a legally contentious move that disregards Article 19(1)(g), which protects the right to practise any profession,” says Roma Priya, Founder, Burgeon Law. Smita Singh, Partner at S&A Law Offices, points out that the 28% flat rate has caused “untenable financial distress,” with retrospective demands often exceeding company revenues. “It stifles innovation, deters investors, and may force gaming firms to relocate abroad. Judicial clarity is essential.” The crackdown has also opened the floodgates for grey-market offshore betting platforms, allowing them to skirt Indian tax laws while drawing players away from domestic legitimate platforms. Stakeholders warn that this shift not only undermines licensed operators but could also cost the government significant long-term revenue loss. The illegitimate industry is causing massive losses to the legitimate sector, says Siddharth Sharma, CEO, Head Digital Works. “You have to compete with legitimate operators and this ecosystem of illegitimate operators. Second, if customers lose money (to illegal operators), they lose faith in online gaming,” he says. Hyderabad-based Head Digital Works is one of India’s oldest online skill-based gaming companies and operates platforms such as A23.com and cricket.com. Sharma says for the average Indian it’s hard to distinguish between what’s an “acceptable” game and what’s not. “A number of these illegal platforms have officially or unofficially plastered a lot of celebrity faces (on ads), including cricketers, and built a cloak of legitimacy,” he says. The central problem, say industry bodies, is the lack of clarity on what constitutes a game of skill versus chance, the old gaming vs gambling debate. “We’re actively engaging with regulators and international frameworks to codify this distinction in a way that fosters innovation and safeguards players,” says Anuraag Saxena, CEO of the E-Gaming Federation of India, an association that represents one out of three gaming unicorns in India. “Recognising skill-based gaming as a legitimate, talent-led activity is essential to unlocking its economic potential.” The industry is betting on the Supreme Court’s pending verdict on this. Roland Landers, CEO of the All India Gaming Federation (AIGF), which represents 130 e-gaming companies, echoes the sentiment. “Growth has been muted on the profitability front. My hope is that the prospective GST is reviewed, both on rate and valuation. We have half a billion gamers, but revenues could be far higher with rationalised taxation.” Illegal betting is not just a regulatory concern, it poses a serious threat to financial integrity and national revenue. "During the IPL season, our systems detected over 30-35 illegal gaming and betting app-related ads on government websites targeting Indian users. We have also noticed a notable rise in usage of these betting and casino gaming apps across Tier-2 and Tier-3 cities. These operations are part of a sophisticated ecosystem leveraging mule accounts to move funds, convert them into crypto, and launder money out of the country," says Dhiraj Gupta, Co-Founder an CTO, mFilterIt, a Gurugram-based ad fraud detection solutions company. New monetisation models As regulatory uncertainty clouds the RMG space, companies are doubling down on casual- and mid-core gaming, ad and IAP-led businesses. Delhi-based Gamezop, for instance, operates at the intersection of gaming and adtech, targeting India’s 300 million casual gamers. The platform offers a curated library of HTML5-based games that load instantly within third-party apps like Paytm, Samsung Internet, and Xiaomi, with no separate downloads required. “The future of casual gaming lies in removing friction,” says Yashash Agarwal, CEO and co-founder, Gamezop. “Videos took off because YouTube removed the friction of downloading them individually. Gamezop is doing the same — offering instant gameplay within digital products people already use.” While Gamezop is building scale in casual gaming, Bengaluru-based Felicity Games is chasing the high-growth mid-core segment, valued at around $2 billion in India. It works closely with indie gaming studios, providing end-to-end support for game development, publishing, and monetisation. “India’s indie studios are full of creativity but lack structured mentorship and exposure to global monetisation models,” says Anurag Choudhary, founder and CEO, Felicity Games. “We act as co-creators, not gatekeepers, offering user acquisition, tech, and monetisation tools to help them scale.” Mid-core games are growing in prominance in India, with many smaller studios entering the fray. Bollywood actor Amitabh Bachchan recently forayed into the world of gaming as the co-founder of Tara Gaming, partnering with author and broadcaster Amish Tripathi and gaming veteran Nouredine Abboud. “If India can break through in this segment, we can generate tonnes of value and employment for our country. Second, gaming is a great way to get our stories and narratives out. Traditional Indian epics are particularly well suited for gaming. From both perspectives, it’ll be fantastic,” says Tripathi. Challenges and opportunities Despite being one of the largest online gaming markets, India has not been able to create a global hit. Mittersain of Nazara thinks chasing a single blockbuster IP is high-risk, high-reward. “But the economics in India have traditionally been low ARPU, high engagement. Building a sustainable business here often means creating repeatable monetisation engines, not one-hit wonders.” India’s ARPU (average revenue per user) in mobile gaming is around $5-7 annually, compared with $30–40 in markets such as the U.S. or Japan. Sharmilee Daru, founder & CEO, 4WD Gaming, India’s first gaming PR & marketing company, says India is a price-sensitive market and essentially leans more towards free-to-play games. “With the evolving ecosystem and aspirations, India is witnessing an increased investor interest, rise of vernacular content, and a sharper focus on monetisation strategy. The government’s recognition of the gaming sector is fuelling growth.” Analysts say e-sports IP can take the industry to a new level. “The real growth frontiers are e-sports IP creation and immersive PC/console gaming (just 2% currently), where deeper monetisation and custom experiences thrive. Currently, most Indian studios focus on outsourced backend work, not original IP. That must change,” says Abhishek Binaykia, partner, Grant Thornton Bharat LLP. Malhi of Zupee also remains bullish on the future of skill-based gaming in India. “With millions of gamers and a fast-maturing digital economy, the scale of opportunity is massive. In our country, the ARPU is still relatively low, which represents a tremendous growth opportunity as India’s digital economy matures,” he adds. As Mittersain says, India is “closing the gap”. Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

Inside India's Multi-billion Dollar Gaming Boom: Dreams, Data, and Disruption Fuel a Digital Revolution

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