India’s non-RMG gaming sector set to expand following RMG ban, says Lightbox report

New Delhi:  India’s gaming industry is shifting focus towards non-real money gaming (non-RMG), following the enactment of the Promotion and Regulation of Online Gaming Act, 2025, according to a report by Mumbai-based consumer-tech VC fund Lightbox. 

The report, titled India’s Gaming Inflection: Non-RMG at Scale, highlights how the sector is poised for growth as regulatory clarity strengthens the position of non-RMG titles.

The report notes that India has nearly 420 million gamers, making it the second-largest market globally after China. While the country ranks among the highest in downloads, monetisation remains relatively low, with average revenue per user (ARPU) at $3.03, compared with $68 in China and $215 in the US. The Lightbox report suggests that this gap presents significant potential for growth, particularly in in-app purchases, subscriptions, and advertising revenue.

Commenting on the report, Sandeep Murthy, Managing Partner at Lightbox, explained, “Indian Gaming is no longer a question of scale. Multi-faceted value creation is in progress. India can leapfrog from a volume-driven market to a value-driven gaming giant.”

He added, “With policy clarifications, India’s young, mobile-first and multi-lingual gamers, and emerging monetisation avenues through in-app purchases, subscriptions, and ads, the opportunity is huge.”

Referring to a poll conducted with Rooter, he continued, “Our poll reveals that almost three-quarters of gamers are already spending in non-RMG, both short and long session cohorts, with over 30% spending Rs. 1,000 per month.”

He concluded, “If provided with the right value, content, and community, Indian gamers will pay. We firmly believe that India can shift from being a volume story to a value story, fuelled by culturally relevant, long-lasting, and monetisable gaming experiences.”

Globally, the gaming market is projected to grow from $177.9 billion in 2024 to $198 billion by 2027. India had the largest gamer base after China in 2024, with approximately 110 million daily players, growing at 5–6% CAGR. 

The new legislation bans real-money games, outlawing their advertising and associated financial transactions, and introduces penalties for non-compliance. Prior to the law, RMG contributed 83–86% of total revenues in India, leaving non-RMG titles, including casual, mid-core, esports, and community-driven games, as the fastest-growing segment.

Non-RMG games in India monetise through in-app purchases, advertising, subscriptions, and hybrid models. Reports from FICCI and EY project in-app purchases to grow at 20% CAGR, while advertising revenue increased 10% in 2024. Esports revenue in India was estimated at $100 million in 2024, with sponsorships accounting for 61% of the total.

Lightbox’s report draws on insights from Rooter, India’s largest game streaming and commerce platform. The survey found that 74.9% of respondents spend on non-RMG in-app purchases, with 31.2% spending over Rs 1,000 per month. 

Spending was observed across both heavy players and those with shorter daily sessions. Popular categories included battle passes and subscriptions (40%), cosmetics (37%), and unlockable content (23%). 

Regional language preferences were prominent, with 34% of users favouring Hindi, followed by Tamil and Telugu. About 12% of respondents found in-game ads annoying, while 38% said excessive ads would make them stop playing, signalling a hybrid monetisation model combining small in-app purchases with rewarded ads.

The report highlights several growth drivers for India’s non-RMG sector, including hyper-localised and culturally resonant content, game-based learning, valued at $873.3 million in 2024 and projected to reach $5.39 billion by 2033, cloud gaming, which is expected to grow from $9.98 million in 2024 to $1.3 billion by 2030, and the use of artificial intelligence to generate localised narratives, optimise monetisation, and personalise gameplay.