Highlights
- India's gaming investment landscape faces uncertainty following regulatory changes.
- Studios are increasingly exploring international markets amid domestic monetization challenges.
- The industry is looking beyond RMG for its next phase of growth.
India’s video game industry is facing a funding and talent crunch as the real-money gaming (RMG) ban, regulatory uncertainty, and weak domestic monetization affect investor confidence. Studios are increasingly targeting overseas markets, while established companies such as Dream11 are exploring new business models.
Anuj Tandon, partner and head of emerging markets at gaming investor Bitkraft, told The Times of India that the expected shift of capital and talent from RMG platforms to traditional game studios has not materialized. Instead, consumer AI companies have attracted skilled developers and fresh graduates.
Bitkraft has also shifted capital away from pure gaming and content investments. However, Tandon expects India's gaming sector to recover in 2027, describing it as one of three fast-growing markets.
Regulatory Uncertainty Weighs on Funding
Game Developer Association of India (GDAI) chairperson, Sridhar Muppidi, pointed out that foreign investors remain cautious following the RMG industry's shutdown and taxation concerns.
Unclear legislative terminology, including provisions that could affect non-RMG mechanics such as in-app purchases (IAP), has further complicated investment decisions. He said investors continue funding studios targeting global and Tier-1 markets.
According to the GDAI and its GameDev Outlook 2026 report, India's video game market generated $1.04B USD in revenue in 2025, with 511M players and an annual revenue per user of $2.04. The market also faces rising hardware costs and lower consumer spending, although AI tools have reduced game development expenses.
Hitwicket CEO & co-founder, Kashyap Reddy, noted that investors now require evidence of user retention, engagement, and unit economics. He also pointed to increasing consumer spending in Tier-2 and Tier-3 cities.
Dream11’s Post-RMG Strategy and India’s Wider Gaming Opportunity
On Nov 5, 2026, Dream Sports CEO, Harsh Jain, announced a revamped Dream11 platform for December 2026-end, without revealing its features or a commercial model. Following the RMG restrictions, Dream11 discontinued paid contests and introduced watch-along experiences.
Dream Sports has subsequently shut Dream Play, Dream Money, and FanCode's merchandise business. FanCode's streaming platforms, DreamCricket and DreamStreet, remain part of its portfolio.
The company also faces GST demands exceeding INR 20K Cr after the Supreme Court upheld the retrospective 28% GST assessment on the full face value of bets placed by online gaming companies.
India's gaming opportunity extends well beyond RMG, with titles such as Hitwicket, other non-RMG genres, and the growing esports ecosystem demonstrating the potential of the domestic market. Yet, realizing that potential will require regulatory clarity, stronger monetization, and investor confidence rather than treating the RMG ban as the industry's defining turning point.
