Bengaluru: Online gaming in India has seen a significant surge in revenue and users in recent years—an indication of a transformative phase in the global gaming industry. As of 2025, around 591 million Indians are online gamers, making up roughly 40 percent of the country’s population and 20 percent of the global gaming population.
The gaming industry accounts for 30 percent of new media market revenue at $3.8 billion, and according to gaming-focused venture capital (VC) fund Lumikai, it is the fastest-growing segment in the new media sector.
During COVID-19, India saw a spike in the entertainment industry, including the gaming segment. The value of the gaming market increased by around 44 percent between 2019 and 2020, from $800 million to $1.8 billion.
An EY report shows that between 2020 and 2023, India’s gaming segment recorded a Compound Annual Growth Rate (CAGR) of 28 percent, and according to Lumikai, it is expected to reach $9.2 billion in revenue in 2029 with a 20 percent CAGR.
According to World Economic Forum, the pandemic saw a shift in media consumption because of the need for virtual entertainment, while being quarantined during the lockdown period. India became the number one country in mobile game downloads worldwide (7.3 billion) in the first nine months of 2020.
Mobile gaming alone makes up 80 percent of the Indian gaming market. In 2020, India recorded a total of 9.6 billion downloads, and this number has only been steadily rising since. Over 90.4 percent of gamers play on mobile devices, compared to 6.1 percent on PCs and 3.5 percent on consoles.
Players are said to have felt a sense of comfort and social connection, viewing gaming a means of escaping the real-world stress, anxiety, depression and loneliness caused by the COVID-19 lockdown. While video games are often viewed in negative light, selective video games make the psychological dimensions of video games more complex and valuable.
There is an overlap among gamer personas. For example, some Real Money Gaming (RMG) players and fantasy gamers also pay for midcore games, which combine elements of casual and hardcore games, appealing to a broader audience. This overlap adds sophistication in the gaming segment.
Levelling up
After the COVID-19 boost to online gaming, how can India keep up the progress?
Console gaming is already seeing a downturn in market volume. The pandemic saw a significant rise in the market volume of game consoles between 2020 and 2021, along with a brief spike around December 2022, after which it declined. However, online gaming has only seen an increase in market value.
In order to keep pace, the gaming segment must understand the needs of the people. A pan-Indian survey by Lumikai shows that Indian gamers play games for relaxation, socialising and self-expression. Most players are attracted to midcore games that have low minimum system requirements, easy operation and access, and clear objectives and progress.
Hypercasual games, such as Ludo King, have surpassed 1 billion downloads. Gamers who started playing hypercasual and casual games have shown an increased proclivity towards midcore games. The inclusion of regional languages, Indian cultural references and mythological storylines has also expanded their reach, attracting a wider demographic.
There are about 2,028 Indian online gaming startups that attracted Rs 22,931 crore in investments from both domestic and global sources between the fiscal years 2020 and 2024.
However, 2024 saw a decline in funding, which EY attributes to “interest rate hikes, tightened liquidity, inflation, changes in taxation and concerns about an imminent recession”.
The industry estimates that the sector will contribute Rs 6,500-6,800 crore as direct tax revenues.
Although RMGs are currently the dominant source of revenue for the online gaming market and are expected to remain so, the CAGR of IAPs (In-App Purchases) is expected to grow more from the fiscal year 2024 to 2029. It is estimated that they will grow at 44 percent, while RMGs are expected to have a relatively slower CAGR of 8 percent.
To sustain this momentum, the online gaming segment has to sustain innovation in both RMGs and IAPs to avoid overreliance on either revenue stream.
Gamers in India are also motivated to pay for games to unlock new content, to upgrade in-game items, and to potentially make money.
The Lumikai survey showed that 70 percent of respondents also prefer to use UPI to pay for games, which would mean that companies have to ensure ease of access to UPI for a smoother paying experience for gamers.
The pandemic may have been the spark, but the development of the gaming industry lies in creativity, cultural connection and technological innovation.
As developers experiment with creativity and the needs of gamers, there is high growth potential.
Nivedha M. is a student of CHRIST (Deemed to be University), Bangalore. Views are personal.