July 2025 | Athera's Odyssey | Online Gaming in India
Decoding India's online gaming industry
Odyssey readers,
You might not think of yourself as one but, chances are, you're a gamer. You might not own a console or have a high-end gaming computer. But, if you do the Wordle every morning, sneak a chess or scrabble game in your lunch breaks, or create fantasy teams during the IPL, you're a part of India's fast-growing online gaming market.
To understand this sector, we interviewed
Roland Landers, the CEO of the All-India Gaming Federation, to understand how regulations are evolving
Vani Kola, Managing Director at Kalaari Capital, to see how investors approach this sector
Shilpa Keswani, who used to work in gaming at YouTube and Google Play, to gauge Google's gaming forays
You can read the entire issue below or, if you want to go to a specific piece, click on the respective links above.
The Rules of Engagement
Creating the scaffolding for an industry
In the grand scheme of things, a decade isn’t much. But for the All-India Gaming Federation (AIGF), it’s been a lifetime. They were founded in 2015 with a big vision for what was then a fledgling industry – online gaming in India.
“We were born at a moment when online infrastructure coalesced, mainly thanks to the Digital India Initiatives,” which also completed 10 years this month, explained Roland Landers, AIGF’s CEO. “Phones were more affordable, internet was becoming cheaper. Going forward UPI made payments seamless, and Aadhaar enabled easy user verification.”
“The economics were also favourable,” he added. “India’s youth and middle-aged individuals were spending their disposable income on interactive entertainment like online gaming, not linear entertainment like movies or TV series.”
“But we also knew that the ecosystem lacked representation and a collective voice. Especially real-money gaming companies needed regulatory help, both in states and at the centre.”
Real-money gaming – online games where players transact money to compete – have long had perception issues in India. The line between games of skill, like rummy, poker, pro ludo & fantasy gaming and games of chance, like a lottery, was unclear to many. Social taboos against gambling led governments to ban online gaming wholesale, necessitating advocacy by the industry body - AIGF.
“Though there was no legislation on this, 70 years of Supreme and High Court judgements favoured us,” Roland clarified. “Existing jurisprudence made clear distinctions between games of skill versus those of chance, and the legality of the former.”
Though jurisprudence proved legality, the industry needed to self-regulate to ensure sustainable growth and maintain a positive image on the basis of the skill - chance distinction. There were few global examples to follow – not many countries differentiated between games of skill and chance as India did. While most closely regulated gambling and games of chance, they allowed games of skill with light oversight.
Some states tried outright banning even games of skill played for money. That’s where the likes of AIGF entered, to advocate for appropriate guidelines, rules and create and ensure self-regulation for the industry.
“Our charter outlined clear principles which were recently adopted industry-wide in a Code of Ethics” Landers explains.
“It requires gaming companies to put in some key protections – do they have strict KYC (know your customer) norms in place, are user deposits protected, are all users over-18, can they set spending and time limits? There’s an annual audit mechanism that ensures these measures are implemented.”
Over time, their work paid off. “Policymakers are very well informed and more nuanced now,” Landers acknowledged. “The states previously banned online gaming are now implementing positive regulations because they see its economic benefits. Even the Central Government notified MeitY (the Ministry of Electronics and Information Technology) as the nodal ministry for all relevant matters. There’s clear legitimacy to this, and recognition that real threats come from the offshore illegal gambling.”
The online gaming growth story
In the decade since AIGF’s inception, Landers believes the industry’s lived up to its potential. “Touching $3.5 billion in revenue and is the preferred entertainment destination in the Indian media entertainment landscape, he emphasises. “Three unicorns have emerged. Big Tech like Meta allows companies to advertise, acknowledging their legitimacy. At one point there were 900 companies operating; even after the new in-direct tax impact, there are still about 500+. That’s a lot of direct and indirect jobs generated.”
“It’s clear – online gaming has gone mainstream in India and is a key part for any vision of a trillion-dollar digital economy.”
Domestic growth isn’t uniform; different games appeal to different geographies and demographies. “Games like pro-Ludo are popular across the country, and throughout tier- 1, 2, and 3 cities because everyone’s grown up playing it. Rummy might be more popular in the South, while Poker is played by more elite audiences while fantasy gaming attracts sports fans.
“Games scale easier as entertainment relative to movies or TV shows, because you don’t need to translate culture. Once players understand the rules, they’re ready to go regardless of their language or location.”
But he doesn’t believe that Indian online gaming companies should limit themselves to domestic markets. “Look at Nazara – it’s a listed company who gets significant revenue from overseas. Even MPL acquired a company in Europe. Many developers are creating battle royale games like PUBG, I’m sure some will spread beyond India.”
Some avenues might be trickier than others for Indian developers, Landers concedes. “Triple-A games are harder to make in India. These games [like the erstwhile FIFA series or Call of Duty], known for their high production value and marketing, can cost up to $50-70 million to develop.”
“We do support Indian video game developers through the All-India Game Developers Forum (AIGDF) and want to see a triple-A game made from India for the world,” Landers says, “but it will be a slow, capital-intensive process. We’ve got the tech talent, but you need to marry that with game design, storytelling and creativity.”
“Raji, a game based on Indian mythology, has made a start on this. And we have a lot more culture to draw on. Think about it; like Japan with anime or Korea with K-Pop – that’s culture wrapped in media entertainment. Our history and mythology are valuable intellectual property to draw on. Sure, it’s going to be a slow-capital intensive process. But it’s going to happen.”
Going all-in on gaming
Kalaari’s big bets
Kalaari Capital has amassed an impressive portfolio in online gaming. They were early investors in Dream Sports (Dream11’s parent company), India’s first gaming unicorn. They’ve got equity in casual game developers like Triple Tap and Bombay Play, midcore developers like Studio Sirah that create games based on Indian mythology, and even companies grooming talent for this sector in Outscal.
“We’re bullish on gaming because India has over 650 million smartphone users, cheap data, among the lowest data costs in the world, and large time-rich populations who want entertainment. The gaming market in India has crossed $3 billion in 2024 and is expected to cross $7.5 billion by 2028," says Vani Kola, the Managing Director of Kalaari.
”For over a decade, we’ve searched for mobile-first models that capture engagement. And there’s no doubt that India’s got potential; even though it lags behind others on revenue - ARPU [average revenue per user] here is under $10 compared to $50+ in the US, it’s a crucial market for major games like Fortnite, or previously Angry birds and PUBG.”
Making in it India
In price-sensitive, mobile-first markets like India, developers can’t copy playbooks from elsewhere, according to Kola. “You have to create smart mechanisms to incentivise in-app micro transactions. One of our companies, Eloelo, isn’t a gaming platform per se, but hit $30 million ARR by gamifying video streaming, encouraging impulse transactions, and building relationships between creators and fans. Gamified engagement and low-ticket purchases have created new monetisation avenues across industries. Virtual gifting on live-streaming platforms in India alone is a $1 billion+ market and growing 50% YoY”.
Microtransactions have fundamentally reshaped payment behavior in virtual platforms especially in gaming. Unlike traditional pay-to-play models, microtransactions allow users to spend in small increments, often as low as ₹10–₹50, on items like skins, avatars, badges, or digital gifts.
In India, this model has proven particularly powerful due to UPI adoption, frictionless one-click payments, and cultural preferences for “earning status” via digital collectibles or leaderboard boosts.
”You also need to identify your whales - the 5% of players who’ll make you big money and drive ~70% of the revenues,” she continues. “They need to stay interested for years, not hours, through depth of gameplay, otherwise you’ll have a lot of churn.”
”Games with social features - a network to play with, a leaderboard to compete against - work better compared to others, because users feel a sense of mastery with them.”
Producing successes requires a highly trained workforce, one that’s not easily available in India.
”Game development isn’t just one thing. You’ve got programming, engineering, algorithm development, storyboarding. India doesn’t have a readymade talent pool, or many avenues where game development is taught as a degree, unlike abroad,” Kola notes. “Most education happens through self-learning or on-the-job. In fact, a lot of today’s studios have their roots in Zynga’s early setup in India, where many developers learned the trade.”
Kalaari’s investment in Outscal, then, enabled the development of a specialised workforce for this sector. “Though some business is B2C, a lot of clients are B2B; companies use them to rapidly upskill developers and keep up with evolving technology.”
The fantasy of money-making
Real money gaming far and away leads India’s online gaming ecosystem. Dream Sports became India’s first unicorn in 2019. Mobile Premier League (MPL) and Games24x7, have heavily bet on real-money gaming as well.
Fantasy cricket, where users create virtual teams of players in real-life competitions and enter paid contests, is central to all their models.
”We all say, tongue-in-cheek, that if you understand ABC - astrology, Bollywood, and cricket - you understand India,” Kola said with a smile. “Cricket’s always had a massive audience and high familiarity. But without the IPL, which gets over 500M viewers, I don’t think fantasy cricket would take off. That brought in tribal following and rituals around engagement.”
”People watched matches together and loved conjecturing - who’s going to win, which player will do best. Fantasy cricket was phygital engagement at its best - it brought a digital structure to a physical game and its rituals.“
“There are low barriers to entry. It’s easy to understand and people can play for free. If they want to become part of leaderboards, they can start by paying 40 rupees and engage at higher tiers if they want. For Fantasy Platforms, APRU’s usually go as high as 300-500 rupees during the IPL season.”
The difficulties of building a blockbuster
Indian developers have made headway in real money and casual/hyper casual games. But there’s a tier still out of reach - the blockbuster, triple-A title that makes waves in global gaming circles.
“India’s not as mature as other markets,” Kola explains, “and what works here may not work abroad. The ARPU models are completely different.”
To create something from India for the world, though, Kola’s certain that it needs to be culturally unique. It’s what helped Japan export anime, and could be India’s playbook.
“We’ve got deep mythology to draw on and have seen similar success in other media,” she elaborated. “Look at how Bahubali became a pan-Indian phenomenon. Previously you thought that Bollywood could succeed in South India, but South Indian films couldn’t go beyond their region. Bahubali changed that dynamic even in a deeply rigid industry.”
“Of course, you need to be sensitive with mythology,” she clarified. “For many, these aren’t just stories. There are sentiments attached, so they won’t be seen as just games. But derivatives of mythology could work - Chhota Bheem’s succeeded on TV for years now. And I know a company turning mythology into a knowledge game. Whether they can get enough mythology buffs to pay is another question. But India’s a big market for fantasy media, so these models could succeed.”
Getting experimental
Rapid tech changes are making gaming more advanced, engaging and realistic. But being at the cutting edge of technologies like augmented reality and virtual reality is expensive, potentially beyond the reach of Indian developers.
“You launch new devices in mature markets where you can charge more,” Kola explained. “Over time, as costs get amortized, there’s a downward price spiral that allows mass adoption. With AR and VR, we’re still early in that process. I’ve seen globally rich gaming environments created with these, but in India I think they’ll be a part of education and corporate training before gaming.”
Because India’s a mobile-first market, that’s where experimentation is needed, Kola feels.
“Developers need to focus on collaborative play in those interfaces, simplifying them for mass participation, and keeping them interesting so people continue playing,” she emphasises.
She acknowledged that game developers, skilled as they are at making good products, find the business side of building challenging.
“Developers also need to look at their target markets more closely. It’s not about figuring out what works for tier 1, 2, or 3 users. Are you looking at Gen Z individually? Are you targeting women over-40? If you think of it, worldwide, strategy and puzzle games are largely played by women, but in India they’re left out.”
”The long-tailing of audiences hasn’t happened well. The games you play at 14 aren’t what you play at 40, and developers need to keep up. It’s about finding out where in their life cycle your audience is, and what’s going to engage them at that point,” she concluded.
Understanding Google’s Play
Google’s gaming strategy
“Being a consumer centric company, Google will always go where the audience is, and communities form – gaming emerged as that space over the last few years,” says Shilpa Keswani, who formerly worked in gaming and partnerships both for YouTube and Google Play.
“Traditional content and creator content is the mainstay at Youtube. During my time there, we dabbled in sports, news, and other niches that were endemic to the platform, but we saw gaming generate massive engagement” she expands.
“We had Youtube stars like PewdiePie popularising gaming content (he later became the largest YouTuber at one point, exceeding 100M subscribers). And while the platform was refining its live streaming capabilities, the engagement and gratification received by creators on Twitch [a competitor in video game streaming] encouraged the YouTube’s Gaming Team to further our efforts in platform capabilities and encourage engagement on the platform. This included refining our live chat capabilities, tipping for streamers & rewards and gratification for the viewers. When the team saw live streamers driving game discovery and popularity, we knew this was big.”
In addition to gameplay streaming, YouTube has recently integrated interactive games on its platform through ‘Playables.’
“Over the years, we consistently saw triple-A titles hitting it out of the park. Gaming communities rallied behind them. However, driving organic discovery and engaging the midcore and casual gaming publishers was a priority for YouTube. Creating a funnel where people sampled games here, then went deeper, was a big focus. Netflix’s integration of games on their platform gave the necessary nudge. While I can’t comment on the monetization strategies – I’d think the first goal would be driving discovery and maximise engagement. This is a platform known for communities, which makes it attractive for advertisers. YouTube’s unique in the way it has the complete flywheel.”
“The Google Play Store [their Android app store] is another important piece,” she adds. “It’s a marketplace for developers to distribute games and users to discover them. While there is in-app monetization via advertising, which is significant, digital payments are a mainstay of the Play business model.”
“Since India is predominantly a mobile gaming market, Play encourages developers to build for mobiles, and keep up changing device types and screen sizes. In this effort, Play tried to make mobile games seamlessly playable across a range of handsets and with large screen integration. The cloud team also deeply engaged with gaming publishers to adapt and help the cloud infrastructure to become central to their operations, so that we would have tight-knit relationships instead of just being a distribution platform.”
Until 2022, Google also operated Stadia, an ambitious cloud service that streamed high-end games right to your device. “We tried going deep into the market with that but I believe the teams quickly realised that building games, given the penetration of the incumbent players, required a different skillset and dedicated gaming workforce.”
The play for India
Though online gaming may be a priority for Google worldwide, India isn’t #1 of their agenda. While Indians constitute the second largest number of gamers worldwide, after China, they’re also frugal. According to a 2024 Newzoo report, the average Indian gamer spent $13 annually, trailing even other developing markets in Southeast Asia.
“Korea and Japan always lead Asia monetarily. On YouTube superchats – where viewers tip creators during livestreams – Japanese viewers pay tens of dollars, while the Indians averaged around $1-$1.5. In terms of annual per-user revenue, Indians spend half of what Indonesians and Vietnamese do, and a quarter of what gamers in Thailand do. Because of this, even with a large volume of users the revenues don’t always add up yet.”
Still, this doesn’t mean Google hasn’t tried cracking the Indian market, India is very much the long game.
“At YouTube, we had local teams that focussed on gaming, constantly trying to ensure streamers saw the value of engaging with their communities on Youtube, even as local streaming platforms like Loco and Rooter emerged, creating more space for gamers to express themselves. These streaming platforms made handsome deals with creators, met them where they wanted to be seen, and made them local celebrities” Keswani explained.
“As per Think with Google, Over 40% of Gamers say they discover games on YouTube. Our aim was to embed ourselves in the ecosystem and create value for our gamers and publishers alike. We did numerous pilots across APAC, where the gamers’ journey was connected right from the time they viewed the gaming content to the time they downloaded the game and received in-game rewards for the engagement. ”
Despite their efforts, there are some walls that they and developers hit. “On YouTube, in India, the likes of Free Fire, BGMI, Minecraft and GTA dominate streaming and content creation. There’s a very small audience beyond that. Casual and hypercasual games don’t gain traction, and creating a community for them is challenging for publishers. That’s where Playables has potential – it can be the top of a funnel that gets users playing. But it’s still in beta; access is still limited.”
Succeeding in India is also complicated by regulations that often view gaming with suspicion. “I won’t comment on real money gaming – that’s another beast. But for online gaming in general, policymakers are trying to set checks and balances to prevent the youth from ‘being destroyed’. [With bans] they’re responding to not just data safety concerns, but parent concerns about excessive screen-time, children running away with phones and not focussing on education. It’s a complicated situation, and Google has always partnered with the government on addressing these issues and following guidance.”
What Indian gamers wants
Making blockbuster games that capture an audience isn’t easy, especially in India. “Indian game developers regularly complain about talent moving abroad for pay,” Keswani recounts. “It’s expensive to develop a triple-A title, so it’s no surprise that we’ve got only a few major studios trying.”
“It takes more than seamless gameplay - the community has to come together. How often have you downloaded a game because your peer/friend asked you to try it out? PUBG (now BGMI in India) wasn’t restricted to one country; it transcended language barriers, captivated a global audience, and plugged into the e-sports ecosystem - completing the value chain for players. While casual gamers engaged with the title, serious ones saw potential playing professionally - while it was accessible on their handsets. Even worldwide - we have seen titles like League of Legends, Fornite, Counter Strike, Call of Duty top the charts consistently, with few newer additions like Valorant (2020) making their way into the top charts every now and then. Indian studios can certainly do it, but they really need to create a community of gamers to succeed.”
Keswani does see a hunger for local content. “Raji (by Nodding Heads released in 2020) launched with a lot of promise and popularity, but its success was limited because it was a single-player game only available on PCs, and its gameplay didn’t continue after the main storyline ended.”
What does it take, then, to succeed in India? It’s complicated, but there are a few factors that developers must account for.
“First, you can’t make a game that hangs on a sub-₹20,000 rupee phone. You’re targeting youth who don't have access to high-end smartphones at the onset. They are mostly okay with the same gameplay in a stripped-down experience. That was one of the first questions asked when Krafton launched BGMI in India – PUBG had a lite version, where’s BGMI lite?”
“Second, you need to make it social. Casual games like Candy Crush make for a great individualized experience, and we have seen runaway successes from India like Ludo King that boast of 1B+ installs - but for a triple-A title to succeed, in addition to an exciting storyline, it has to be social, competitive with continued updates to keep the gameplay fresh and exciting and an opportunity to get the community together - very much how sports is. With gaming, if you don’t create a community, you can’t scale,” she concluded.
Pathways
— Ishan Sinha (Athera)
This month, as is topical, we venture into the rapidly evolving world of how machines think. We recommend three essential reads that progress from accessible foundations to profound implications. Our sequence moves from understanding how machines learn, to grappling with what that learning might ultimately become. As we do this, we call upon the spirit of Ludwig Wittgenstein (1889 - 1951), the inimitable philosopher whose work cut across logic, math and language. 75 years after his demise, we still ask: is understanding language the same as thinking?
Start with Why Machines Learn by Anil Ananthaswamy. A masterful exploration of the mathematical and conceptual foundations underlying modern AI, Ananthaswamy (a seasoned science writer) takes us on an illuminating journey through the algorithms that power everything from recommendation systems to LLMs. Unlike typical tech books, the focus is on "why" rather than just the "how"; demystifying concepts without drowning readers in technical jargon. Perfect for anyone who uses AI tools daily but wants to figure what's actually happening under the hood.
Shift from mechanisms to implications with Everything is Predictable by Tom Chivers. Through the lens of the Bayes theorem, Chivers explores how probability shapes both human cognition and machine intelligence. This is a surprisingly entertaining dive that feels remarkably timely as we grapple with AI systems that seem to "predict" everything from our next word to our behaviour patterns. One theorem to rule them all..? Machine intelligence, at least.
End with the heavyweight: Superintelligence by Nick Bostrom. Published nearly a decade ago, this Oxford philosopher's meditation on artificial general intelligence feels more urgent than ever. Bostrom methodically examines scenarios where AI systems surpass human intelligence across all domains, and the existential challenges that transition might pose. While sometimes unsettling, it's essential reading for anyone building or investing in AI. Fair warning: this isn't a light read, but it's perhaps a vital book on the long-term trajectory of AI (and our lives?).
That’s it for this month from us. If you’re new and want the next issue of Odyssey in your inbox, subscribe above. Share this with people you know who are curious about everything at the intersection of tech, VC, and innovation in India.