Recent news has been filtering through that the online gaming market in India didn't just grow — it defied expectations in a way many investors may not have predicted. At a time when it appears that government regulation is trying to extract as much money from players as possible, this is something that is more than a little unexpected. It's time we dived into the details so you can see how things have really been playing out.
How much did the gaming market grow?
India's online gaming market beat all expectations in some quarters by growing an impressive 23% in FY24. Comparing yearonyear revenue is the fairest and most enlightening way to begin the discussion. A rise to $3.8 billion in this key metric means that market sentiment surrounding the blanket goods and service tax was unduly pessimistic.
While the government seeks greater control by applying a 28% blanket tax on all forms of online gaming, players have shown that they will continue to vote with their feet. They will keep playing the games they like and visiting the platforms where they seem happy to spend a large part of their free time. But how are they behaving when we take a closer look?
Consumer behavior driving growth
The two primary revenue streams for online gaming platforms are inapp purchases and ad revenue. With FY29 predicted to bring in $9.2 billion in revenue for online gaming platforms operating in India, these two streams need to hold firm. Here is a quick summary of how they are performing to date:
Players remain tolerant of inapp ads because they view them as the price to pay when they want flexible mobile gaming
Ads are increasingly moving in a usergenerated content direction, doing away with the polished professional ads that users are turning off from.
Inapp purchases continue to hold the attention of seasoned players who want to be able to unlock new features and modes of gameplay.
All signs are that using freeplay versions that run ads is still an effective way to funnel players toward making more lucrative inapp purchases
The continued ubiquity of mobile devices amongst virtually all ages and social classes means that accessing these games has never been easier. As major brands and sporting franchises continue to endorse games, as well as launch their own versions, the industry is only set to grow even faster.
Reputable names holding strong
You only have to look at sites like indiacasinos.com which are trusted by their players to see that reputation is everything in the online world. The simple act of handing over money in person feels so different when it is moved online. Players want to know that they are playing reputable games on platforms that will pay out if they win and that will keep their personal details secure regardless.
An interesting study will be to see how highvalue brands choose to present themselves now that the blanket tax has been applied. Some will want to provide lowcost teaser offers designed to show they are on the side of the public, while others will attempt to sidestep the issue by highlighting the quality of the gameplay and the potential for players to enjoy themselves. At this early stage, it is not yet clear which of these strategies will win out, or whether a hybrid of the two will be the most effective approach.
A new wave of firsttime earners starts spending
Demographic shifts often cause disruption as one form of legacy entertainment makes way for something new that soon becomes the norm. It is interesting that in the mobile gaming world, female players have gained 3 points of audience share in FY24 — up from 41% just 12 months ago. Why is this? Well, there are some key factors at play here:
Women are more likely to engage with usergenerated content and social media
The shift towards this type of advertising has happened at a real pace in online gaming
A new wave of women aged 18 to 30 are entering the world of work with disposable income
It's key to note that while all of the above are true for women, the total number of male players continues to grow too. Young professional men, many of whom work remotely and so don't have to pay high rents in crowded metro spaces, are used to paying for entertainment online. Streaming sites and social media apps are two things they have grown up with, so persuading them to pay at the point of consumption for a third type of online entertainment is not so difficult.
Now that we have seen how and why the industry has rallied against the blanket tax, what else does the economy as a whole have in store for it?
The gaming industry in 2025 and beyond
23 million gamers played for the first time in FY24, with their average monthly playing time jumping by 30%. Online gaming is the fastest growing online entertainment sector in India and one that is fueled by social pressure. If a young professional sees their colleagues playing a game, they are likely to download and start playing. All signs point to accelerated growth over the next 5 years.
– .
Image Credit: KhasKhabar.