India’s gaming industry just shattered a persistent myth. Indian gamers aren’t merely free-to-play freeloaders—they’re willing to spend money, and they’re doing it in massive numbers. A recent Lightbox report titled “India’s Gaming Inflection: Non-RMG at Scale” reveals that nearly 75% of Indian gamers now spend on in-app purchases, marking a fundamental transformation in monetisation patterns that challenges conventional wisdom about price-sensitive Indian consumers. As India boasts the world’s second-largest gamer base with nearly 420 million players, this rising willingness to spend on digital content fuels one of the fastest-growing gaming markets globally, attracting international publishers and developers previously sceptical about Indian market monetisation potential.
The shift proves particularly significant following the 2025 Promotion and Regulation of Online Gaming Act banning all money-based gaming transactions nationally, forcing industry pivot from real-money gaming toward sustainable non-RMG formats including casual games, esports, and hyper-localised titles.
For years, India’s gaming sector heavily relied on real-money gaming, which at its peak accounted for over 80% of revenues through fantasy sports, poker, and rummy platforms where players wagered cash hoping to win larger sums. The regulatory ban sparked a decisive pivot toward non-RMG formats supported by regulatory clarity, changing consumer behaviour, and innovative monetisation models, proving that Indian gamers will pay for quality experiences, progression systems, and cosmetic customisations that enhance gameplay without gambling mechanics. Sandeep Murthy, Managing Partner at Lightbox, stated: “Indian gaming is no longer just about scale. With the right content, community, and monetisation strategies, India can transition from a volume-driven market to a value-driven gaming giant,” where revenue per user matches or exceeds international benchmarks.
Regulatory Disruption Accelerates Model Transformation
For years, India’s gaming sector heavily relied on real-money gaming, which at its peak accounted for over 80% of revenues, creating unsustainable business models vulnerable to regulatory intervention whilst failing to develop sustainable monetisation alternatives. The 2025 Promotion and Regulation of Online Gaming Act banned all money-based gaming transactions nationally, eliminating the largest revenue source overnight and forcing immediate strategic pivots from companies dependent on real-money models toward non-RMG alternatives. This regulatory disruption initially appeared catastrophic for India’s gaming ecosystem, threatening mass layoffs, studio closures, and investor exodus from a sector suddenly lacking proven monetisation pathways comparable to gambling-based revenues that sustained the industry.
However, the Lightbox report illustrates that this transition is underpinned by regulatory clarity eliminating grey areas around gambling legality, changing consumer behaviour demonstrating willingness for legitimate spending, and innovative monetisation models proving viability beyond real-money gaming. Sandeep Murthy emphasised that even without cash prizes, Indian gamers show clear willingness to pay for enhanced gaming experiences across both casual players seeking brief entertainment and heavy users investing hours daily in competitive titles requiring skill development and strategic thinking. The forced transition actually benefited long-term ecosystem health by redirecting talent, capital, and entrepreneurial energy toward sustainable business models, building genuine entertainment value rather than exploiting gambling psychology through variable reward schedules and near-miss mechanics that characterised real-money gaming. International comparisons support optimism—markets like China successfully transitioned from grey-market gambling toward legitimate free-to-play monetisation, generating tens of billions annually through in-app purchases, battle passes, and cosmetics without requiring gambling mechanics.
Spending Patterns Reveal Monetisation Sophistication
The Lightbox-Rooter survey found a striking 74.9% of gamers spending on non-RMG in-app purchases, with 31.2% spending exceeding Rs 1,000 monthly—substantial amounts in a price-sensitive Indian market where consumer spending traditionally concentrates on necessities rather than digital entertainment. Spending behaviour cuts across varied gaming habits, from light players engaging less than 30 minutes daily to heavy players clocking over two hours, demonstrating monetisation potential across user segments rather than concentration amongst hardcore enthusiasts typical of early free-to-play monetisation.
Popular digital purchases include battle passes and subscriptions chosen by 40% of spenders, providing season-long progression systems with unlockable rewards that incentivise continued engagement whilst generating predictable recurring revenue for developers.
Cosmetics including skins and avatars attract 37% of spending, enabling player expression and status signalling without affecting competitive balance—crucial for maintaining fairness whilst monetising vanity purchases that create no gameplay advantages, thus avoiding alienating free players. Unlockable content including levels and maps accounts for 23% of purchases, allowing developers to monetise additional content beyond base games whilst providing expansion value for engaged players willing to pay for extended experiences.
This diversified spending distribution across purchase types indicates a sophisticated understanding of monetisation amongst Indian gamers, who distinguish between fair monetisation that adds value versus exploitative pay-to-win mechanics creating competitive advantages for paying players while frustrating free users and affecting matchmaking. The consumer shift bodes well for developers targeting sustainable revenue streams beyond advertising revenue, which is vulnerable to economic cycles and user acquisition costs, or one-time purchases that fail to capture ongoing value from long-term engaged players investing hundreds of hours.
Regional Preferences Demand Localisation Strategies
Language preferences reveal that approximately 34% of gamers consume Hindi-first content, followed by substantial segments preferring Tamil and Telugu, emphasising the importance of hyper-localised gaming experiences in Bharat markets where English proficiency remains limited despite educational emphasis. This linguistic diversity demands significant localisation investments beyond simple translation, requiring culturally appropriate narratives, character designs, and references resonating with regional audiences whose cultural contexts differ substantially from Western or East Asian markets dominating global game development. Whilst advertising remains a potential revenue channel—particularly for casual games attracting price-sensitive users unwilling to pay upfront or through in-app purchases—38% of gamers indicated they would stop playing if advertisement loads increased excessively, creating revenue ceilings for ad-dependent monetisation.
Additionally, 12% described advertisements as annoying regardless of frequency, suggesting advertising-only models risk alienating substantial user segments that prefer ad-free experiences, even requiring payment for removal. This creates opportunities for hybrid monetisation, balancing free ad-supported tiers with premium ad-free subscriptions. This feedback underscores a preference for hybrid monetisation models combining light in-app spending with rewarded advertisement placements offering in-game currency or items for voluntary ad viewing, balancing revenue generation with user experience quality and avoiding excessive interruptions that frustrate players.
Emerging technologies like artificial intelligence are deployed to generate culturally resonant narratives reflecting Indian myths, histories, and contemporary contexts rather than generic fantasy or science fiction settings dominating Western games, whilst also optimising monetisation through dynamic pricing and personalising gameplay based on individual preferences and skill levels. Lightbox’s report revealing 75% of Indian gamers spending on in-app purchases—with 31.2% exceeding Rs 1,000 monthly—fundamentally transforms understanding of India’s 420 million-player gaming market following real-money gaming’s regulatory elimination. The decisive pivot from gambling-based revenues toward battle passes (40% of spenders), cosmetics (37%), and unlockable content (23%) demonstrates sophisticated monetisation supporting sustainable business models beyond advertising or one-time purchases.
Regional preferences favouring Hindi (34%), Tamil, and Telugu content emphasise the importance of hyper-localisation, while advertisement sensitivity—38% would quit if ads increased—validates hybrid monetisation balancing free ad-supported tiers with premium purchases. As Sandeep Murthy observed, India is transitioning from a volume-driven market toward a value-driven gaming giant, where the right content, community, and monetisation strategies unlock revenue potential matching international benchmarks, positioning India among the world’s fastest-growing gaming markets that attract developers and publishers previously sceptical about Indian consumers’ willingness to pay for digital entertainment beyond basic telecommunications and essential services.