India’s digital gaming market to touch $4.3 billion by FY30, growing at 18% CAGR

India’s $9.3 billion digital media and entertainment industry is entering a new phase of monetization, driven by the twin engines of digital gaming and interactive media, which together are projected to reach $7.8 billion by FY30, according to the latest BITKRAFT–Redseer India Report 2025.

With advertising fatigue setting in and consumers showing greater willingness to pay for premium experiences, the report predicts a structural shift from ad-led to direct monetization models—notably in-app purchases (IAPs), subscriptions, and microtransactions.

Digital Gaming Market at an Inflection Point

The gaming industry in India stands at a crucial turning point. Following the government’s ban on online money gaming in 2025, the sector has undergone a structural reset, shifting focus entirely to digital and esports formats. Despite the regulatory overhaul, the digital gaming market remains resilient, projected to grow at an 18% CAGR to reach $4.3 billion by FY30, the report highlights.

India’s gaming evolution mirrors three key phases—early experimentation during the mobile boom, monetization during the COVID-19 lockdowns, and regulatory consolidation in recent years. Post-pandemic, social and casual gaming witnessed explosive adoption as users sought digital socialization, with titles like Ludo King crossing 100 million downloads and global hits such as BGMI and Free Fire driving monetization.

The esports segment, meanwhile, is expected to grow at a 26% CAGR to $132 million by FY30, supported by sponsorship-led revenues and recognition of esports as a legitimate sporting category under India’s Promotion and Regulation of Online Gaming Act, 2025.

Monetization: In-App Purchases to Overtake Ads

Monetization models are rapidly evolving as Indian gamers mature. The report finds that in-app purchases (IAPs)—once a niche model—are set to overtake ad revenue by FY30, growing nearly threefold between 2024 and 2030. As mid-core and core games become more mainstream, the average revenue per paying user (ARPPU) has risen sharply—from $2–$5 five years ago to $25–$30 in 2024.

Casual and hyper-casual games still rely heavily on advertising, but mid-core and core titles are increasingly driven by player purchases, such as season passes, consumables, and premium upgrades. Rewarded ads, which incentivize players with in-game benefits, are also showing higher click-through rates.

The monetization mix is witnessing a dramatic transition:

In-app purchases are expected to overtake ad revenue by 2030, growing nearly 3x between 2024 and 2030.

Ad-based models, while still critical for hyper-casual titles, are giving way to deeper ARPPU-led growth, with the average revenue per paying user climbing from $3.5 in 2020 to nearly $27 in 2024.

Developers are increasingly turning to rewarded ads and season passes, while “whale” spending patterns are emerging in mid-core and core games such as BGMI and Free Fire.

Esports Finds Its Footing

The esports ecosystem, once niche, is gaining mainstream legitimacy. The BITKRAFT–Redseer report identifies Nodwin Gaming, Skyesports, and Upthrust as key players in the domestic circuit, with platforms such as YouTube, Free Fire MAX Esports, and BGMI Esports Official commanding millions of subscribers.

India’s esports market, currently valued at $40 million, is projected to reach $132 million by FY30, as brand sponsorships, merchandise, and media rights fuel monetization. Advertising and platform subsidies currently account for the majority of revenue, but ticketing, tournament fees, and media rights are expected to emerge as future growth levers.

Interactive media: Subscription surge and nano-payments define growth

The interactive media market—spanning audio streaming, micro dramas, short-form video, and astro tech—is forecast to grow 7x from $440 million in FY25 to $2.7 billion by FY30.

Key revenue shifts include:

Audio streaming is set to quadruple to $300 million, led by direct payments and subscriptions on platforms such as Pocket FM and Kuku FM. Around 16% of users already pay via UPI AutoPay, with ARPU levels averaging $8.

Micro dramas, a fast-growing format mirroring China’s trajectory, are projected to hit $700 million by FY30, with monetization primarily through subscriptions (81%) rather than ads, due to low CPMs in the Indian market.

Short-form video and social discovery platforms like Josh, Moj, and Chingari are experimenting with virtual tipping and 1:1 private calling, which together account for over 90% of platform revenue, while ad income remains marginal.

Astro and devotional tech platforms are digitizing a $40-billion offline market, using 1:1 paid consultations and UPI-based microtransactions to build steady subscription income.

The report highlights the rise of nano-transactions—payments as low as ₹1–₹10—as a crucial bridge between free and paid consumption, particularly in Tier 2 and Tier 3 markets.

A maturing monetization ecosystem

The report notes that India’s gaming and media users are maturing rapidly, with Tier 2+ audiences increasingly paying for content once restricted to urban metros. Vernacular content, AI-led personalization, and seamless payment rails via UPI AutoPay are cited as enablers of this shift.

“India’s monetization story is moving from dependence on advertising CPMs to a diversified stack of in-app purchases, subscriptions, and microtransactions,” the report concludes. “As user willingness to pay rises, the next five years will see India transform from a consumer market into a monetizing market.”