Gaming In 2026: What’s In Store In The Post-RMG Era

One could say that 2025 marked the final act of the real money gaming saga with a bitter ending for startups. The RMG story started turning sour in 2023, when the first online gaming rules were introduced and later the clarification on 28% GST on real money gaming proceeds served to kill any momentum that was seen by gaming giants.

After two years of legal challenges and debate, the ban on real money gaming in 2025 was ultimate and final. It triggered the collapse of giants such as Dream11, WinZO, Hike, MPL, Gameskraft, Games24x7, and Nazara-backed Pokerbaazi, among others.

The abrupt ban, which came into effect in October 2025, set off widespread layoffs and the shutdowns of numerous startups. Despite pivoting, the largest of the real money gaming companies were forced to downsize. Some have had even more severe troubles in the aftermath.

The fallout peaked when the Enforcement Directorate (ED) arrested WinZO’s cofounders, Saumya Singh Rathore and Paavan Nanda after raids and the freezing of roughly INR 505 Cr in assets. According to the agency, WinZO kept running real money gaming offerings for overseas markets out of India despite the ban. There were also allegations of rigging and bots masquerading as real users.

All this means that the Indian gaming industry is in the post-RMG era. And for the gaming industry beyond the real money brigade, this is a major opportunity.

New rules finally offered clarity, a clear distinction between gaming categories, and explicit support for esports and online social games. This promises to bring more Indian games to the mainstream, and not just fantasy sports.

“We view regulatory development positively because they bring clarity and stability to the industry. Clear frameworks ultimately support players, developers and publishers, and help the industry mature more responsibly,” Sean Hyunil Sohn, CEO at KRAFTON India, told Inc42.

In particular, esports received a major boost with the inclusion as a demonstration sport at the Khelo India Youth Games 2025, after India’s debut in the esports event at the Asian Games 2022.

While the RMG ban had a chilling effect on funding, early stage gaming startups continued to attract capital from investors such as Krafton, and Bitkraft Ventures.

“What we’re seeing now, since the ban, is a wave of new startups emerging in interactive media and gaming and many founded by people coming out of the RMG sector. Middle-management professionals and young talent who left those companies, or were unfortunately laid off, are now building new ventures of their own,” Anuj Tandon, India partner at BitKraft Ventures, added.

This renewed activity is a positive sign because it brings clarity to the ecosystem. More people are choosing to build in this space. As gaming now stands at a very critical juncture, let’s understand how experts see this industry navigating the change and the key predictions that will define the Indian online gaming sector in 2026.

The Next Level For Indian Gaming

According to industry stakeholders, the worst of the investment slowdown in gaming is over, as VC firms have recalibrated their approach. The new regulations have brought much-needed clarity. However, with further regulatory nuances still expected from the government and global gaming investment also facing a slowdown, funding is unlikely to see a multifold surge. It will, however, see steady improvement.

Moreover, investors are now focused squarely on monetisation: they want to see revenue, clear pathways to profitability, and sustainable business models. As the market matures, investors are prioritising companies with strong revenue fundamentals, which naturally slows the pace of deployment. Still, activity is expected to improve in the second half.

For example, as Tandon noted, BITKRAFT expects more early-stage rounds driven by founders emerging from the 2025 reset. “The pipeline for 2026 is stronger than anything we’ve seen in years.” He remains especially bullish on mobile gaming, interactive media, and AI-native gaming infrastructure.

Krafton also plans to continue its active investment strategy. “Since 2021, we have invested over $200 Mn in India, and we continue to invest more than $50 million annually to grow local studios, develop esports pathways, support creator networks, and build India-first IP with the potential to succeed globally,” the India CEO said.

A Turning Point For Casual Gaming

After the RMG ban, there is now a huge focus on casual and hyper casual gaming. The most visible shift is not only the surge of founders entering the space, but also the fact that they are building for global audiences from day one.

“This entrepreneurial appetite marks a turning point, but its long-term impact depends on whether capital finally flows beyond the seed stage. For decades, India has raised barely $50 Mn for casual and social gaming IP, an amount too small to nurture a pipeline of enduring studios. Without sustained investor conviction, early promise risks hitting a ceiling,” a gaming analyst said.

However, this will only change when the investors see a strong precedent, when one company delivers an outlandish, category-defining success. Although a few companies have also managed to raise funds, the cheque size remains very small. The real question is whether this capital will continue to flow beyond the seed and follow actual business performance.

Production Capabilities To Become More Critical

At a time when the focus is shifting more towards core gaming, the gaming ecosystem will focus more on deeper production capabilities, stronger publishing infrastructure, and a more disciplined approach to genres. This change is not happening because the industry suddenly became more ambitious, rather it’s happening because the market is forcing it to.

With organic installs disappearing, studios no longer have the luxury of casually testing ideas or relying on accidental scale. They now need proper user acquisition, capital for paid testing, and the data muscle to evaluate what actually works. That pressure is narrowing the field, Anurag Choudhary, founder and CEO of Felicity Games, said.

“Only teams that can build or access these capabilities are moving forward, and that reality is pushing Indian developers to become more methodical, more specialised, and more operationally mature,” he added.

Studios that cannot acquire new gamers, monetisation know-how, or analytics pipelines are now struggling to validate new titles.

As a result, some Indian publishers have stepped into this gap, building data-driven pipelines that have even allowed them to scale a handful of titles to $250K per month, primarily from Western markets.

Meanwhile, the studios have also started focussing on genre rationalisation as well. Studios are starting to focus on a smaller set of reliable game types such as Solitaire, word games, Sudoku, and sorting puzzles.

These genres don’t swing wildly in performance, and their players behave in more predictable ways. Because of that, studios can estimate lifetime value more accurately and face less risk when spending on user acquisition. In a market where every install costs money, this predictability matters a lot, so teams are tightening their efforts around genres they know they can sustain.

In-App Purchases: The New Gaming Revenue Engine in 2026

As the gaming ecosystem is maturing slowly, monetisation is no longer a secondary topic. In-app purchases (IAP) have become the industry’s strongest engine, growing from roughly $300 Mn to nearly $1 Bn annually in just a few years. According to industry stakeholders, this will lead to monetisation in the next year as well.

“The only and the fastest way the gaming industry can monetise is through in-app purchase,” Kumar said.

This indicates a deeper behavioural change: Indian gamers are not just engaging; they are paying. India now has five to six games doing over $100 Mn in domestic revenue.

Besides the gamers paying propensity, another factor that is desperately driving studios, publishers to focus on in-app purchases is the fact that the advertising market is not growing as fast as the industry expected.

“On the ads side, there’s massive consolidation happening among ad networks. Even though the number of advertisers on the backend is increasing, the overall consolidation means publishers end up with lower revenue yields. As monopolies strengthen, they naturally keep a larger share,” Choudhary added.

That’s why an IAP-focused strategy looks more attractive in the long run, although there are challenges such as in-app purchase-driven games taking much longer to break even as compared to ad-driven games. This is pushing developers toward hybrid monetisation, combining ads with IAP to balance risk, improve LTV, and shorten breakeven windows.

The third major shift is the rise of web shops and alternative billing channels, driven by the global precedent set by Epic vs. Apple. More publishers are routing payments outside app stores to avoid 30% fees and build direct player relationships.

Meanwhile, international players like Krafton are leaning into India-first monetisation by focusing on value, transparency, and culturally relevant content. This includes festival-timed drops, India-specific pricing, and optional purchases that reward engagement rather than pressure players.

“BGMI’s strong tier II and III penetration has shown us the importance of
balanced monetisation. The priority remains sustainable monetisation that grows organically
alongside trust, not through aggressive tactics,” Krafton’s India head Sohn said.

Esports Competitive Pyramid Takes Shape

Lastly, another interesting area to watch out for in 2026 would be how esports fares in India. The past few years have seen explosive highs and abrupt slowdowns, game bans, platform exits, and uneven publisher participation, but industry leaders now see a clearer trajectory with more government support.

The biggest trend shaping 2026 will be the rebuilding of India’s esports pyramid: widening grassroots participation, expanding tournament supply, and aggressively growing viewership as the single most important metric.

Today, esports in India is heavily skewed toward a handful of titles where the publisher actively invests. For esports to scale, more developers need to adopt an esports-first mindset, designing games with spectator potential and committing marketing dollars to competitive ecosystems. This shift has already begun.

The second key trend is the return of mass-tier tournaments. A few years ago, India had dozens of active tournament organisers, regional championships, weekly cups, and community-driven leagues. That grassroots layer has thinned dramatically, shrinking the ecosystem to three to five major tournaments each year. In 2026, the industry will try to rebuild that missing middle. More small and mid-tier organisers are expected to return, as per industry sources, driven by platform partnerships, brand interest, and cheaper streaming tools.

Hence, viewership will dominate every conversation in 2026. Advertisers invest only when viewership crosses thresholds, governments get involved only when audiences are visible at scale, and publishers double down only when tournaments deliver meaningful reach.

Platforms like JioGames, NODWIN, Krafton, and Rooter are all pushing to expand esports audiences by improving distribution, accessibility, and broadcast formats. If viewership compounds at a healthy pace next year, India could realistically build the foundation for a $500 Mn–$1 Bn esports sector by 2028.

[Edited by Nikhil Subramaniam]