India’s gaming industry concludes 2025 following a year of significant regulatory, structural, and market change that has reshaped the sector’s business models, investment landscape, and long-term growth trajectory.
The year was marked by the introduction of comprehensive regulatory reform, the formal recognition of esports as an official sport, and a broad industry shift away from real-money gaming toward esports, social gaming, and original intellectual property.
Regulatory Reform Reshapes the Industry
The Promotion and Regulation of Online Gaming Act, passed in 2025, resulted in the nationwide prohibition of real-money gaming formats, including fantasy sports and paid-entry skill games. The legislation brought an abrupt change to a segment that had accounted for a substantial share of industry revenues.
In the immediate aftermath, several operators paused or exited the Indian market, early-stage startups shut down, and job losses were reported across the ecosystem. At the same time, the Act provided long-awaited regulatory clarity, prompting companies to reassess their long-term operating models.
Over the course of the year, the video and social gaming industry defined its identity more strongly, with the world recognising the potential and promise of scalability and steady growth in this sector. Engagement-led formats, including free-to-play games, social gaming platforms, and competitive gaming ecosystems built for scale and sustainability, now define the gaming ecosystem, providing much-needed understanding, clarity, and recognition to it.
“India’s gaming sector is at an inflection point, with scalable models, original IP, and global distribution coming together. Strengths in video, free-to-play, and social gaming position the market for durable, long-term growth. 2026 offers a compelling window for sustained value creation.”
Nitish Mittersain, Jt. MD & CEO, Nazara Technologies
Esports Gains Official Recognition
Beyond regulatory reform and esports recognition, 2025 also saw increased institutional development within India’s gaming sector.
New industry associations were launched to represent publishers and developers, while existing bodies strengthened engagement with policymakers on issues such as talent development, exports, and ecosystem growth. Government and industry stakeholders also advanced longer-term frameworks aimed at positioning gaming as a creative and technology-driven export sector.
These developments contributed to a broader shift in how the industry is positioned, with gaming increasingly viewed through the lens of industrial policy, digital exports, and creative infrastructure.
“2025 was a year of reset for India’s gaming industry. The Promotion and Regulation of Online Gaming Act has brought much-needed clarity and direction, and the next phase must focus on building real capacity – developing talent at scale, incubating new studios, and supporting them through government-backed acceleration.
The next decade belongs to India if we make the right investments today. As the ecosystem shifts from consumption to global creation, India has a genuine opportunity to emerge as a major exporter of gaming content. At GDAI, we have been actively working with both central and state governments to help shape and execute many of these efforts.”
Sridhar Muppidi, Chairperson, GDAI
Investment Recalibrates Toward Sustainable Growth
Investor behaviour mirrored the industry’s structural shift. With real-money gaming models no longer viable, 2025 became a year of capital recalibration rather than rapid expansion.
While some investors exited the market, global gaming-focused funds continued to express long-term confidence in India. Capital increasingly flowed into game development studios, core gaming technologies, esports platforms, and original intellectual property. Strategic acquisitions and partnerships reflected a growing focus on scalability, content quality, and international reach.
“Regulatory clarity in 2025 has been a turning point for gaming investments in India. As capital moves away from short-term models, we’re seeing stronger opportunities in game development, core technologies, and gaming-influenced interactive media platforms.
With the broader industry now projected to grow from a $2.4 billion market in FY25 and set to expand at an 18 % CAGR toward a $4.3 billion digital gaming and esports industry by FY30, BITKRAFT Ventures is confident to double down on India as a long-term, globally competitive gaming market.”
Anuj Tandon, Partner – India & UAE, BITKRAFT Ventures
Market Growth Continues Amid Change
Despite regulatory disruption, India’s gaming market continued to expand in 2025, supported by affordable smartphones, low data costs, vernacular content, and increasing acceptance of gaming as mainstream entertainment.
Gaming also strengthened its connections with popular culture, with more collaborations across film, television, sports, and creator ecosystems. Streamers and content creators played an expanding role in discovery, community engagement, and audience growth.
Platform Economics Emerge as a Key Consideration
Alongside regulatory reform, platform economics emerged as a growing focus area for the industry in 2025.
“We’ve learned that lasting outcomes in gaming come from building for longevity, not spikes. At Felicity, we focus on evergreen games supported by infrastructure that compounds, where every title benefits from the ones before it. As we move into 2026, our priority is simple: keep building patiently and create a publishing platform that can scale sustainably for years.”
Anurag Choudhary, Founder & CEO, Felicity
As publishers leaned further into free-to-play models, app store commissions, particularly on mobile platforms, became one of the sector’s largest cost centres. While companies began exploring alternative distribution channels, scale and discoverability remain ongoing challenges.
Industry stakeholders increasingly view platform dependence as a strategic issue that will shape future business models.
Outlook
As India’s gaming industry enters 2026, it does so at the start of a new phase of development. The events of 2025 accelerated a shift toward more sustainable and globally aligned growth foundations.
“As we head into 2026, the focus for game studios is shifting decisively toward smarter scale. AI is already transforming how we design, test, and work with games – shortening development cycles, personalising player experiences, and improving live-ops efficiency.
The next year will be less about chasing volume and more about building deeper engagement and globally competitive IP, with AI becoming a core creative and operational layer rather than a novelty”
Vidhit Mehta, Founder & CEO, Shortgun Games
Esports, original intellectual property, institutional engagement and cultural integration are expected to remain central to the sector’s evolution, positioning India’s gaming industry for its next stage of growth.
