India’s online gaming sector to hit $3.7 billion by 2027: EY report
India’s online gaming segment is projected to grow at a compound annual growth rate (CAGR) of 10.8 percent, reaching ₹316 billion ($3.7 billion) by 2027, according to Ernst & Young’s latest report, . The study, launched during WAVES 2025, highlights the sector’s data-backed growth and rising global relevance, supported by a mobile-first population, growing smartphone penetration, and low data costs.
In an exclusive conversation with SiGMA News, Ashish Pherwani, Leader of the Media & Entertainment Sector at EY India, explained that this growth is driven by factors such as rising per-capita GDP, the annual addition of approximately 15 million smartphones, and a young, predominantly mobile-first population, supported by one the world’s lowest data charges.
Mobile gaming dominates
India remains a predominantly mobile gaming market, with over 90 percent of users accessing games through their smartphones. The number of online gamers is expected to increase from 488 million in 2024 to over 525 million by 2027.
Less than 10 percent of gamers currently use PCs or consoles, keeping mobile platforms central to the growth story.
Esports games to outpace real money gaming
Casual gaming and esports are forecast to grow at a 16 percent CAGR, while real money gaming—covering fantasy sports, poker, rummy and ludo—is expected to grow at a slower 9 percent CAGR. This marks a shift in user preferences and revenue dynamics.
“The Indian online gaming segment earned ₹232 billion in 2024, with 77 percent of this revenue coming from transaction-based games,” according to the report.
However, growth in this segment has slowed due to the 28 percent Goods and Services Tax (GST) levy on gross deposits, effective from 1 October 2023. The levy has affected operating margins and slowed new user acquisition.
Tax pressure slows real-money gaming, but innovation continues
Transaction-based gaming, despite being the largest sub-segment, is expected to grow slowly due to recent regulatory changes. The new 28 percent GST on gross deposits, effective from 1 October 2023, has pressured operating margins. Additionally, uncertainty over past GST liabilities of over $13 billion is affecting fresh investments. The outcome of ongoing litigations will be crucial for the industry’s future.
Pherwani noted that gaming companies have absorbed the 28 percent GST levy on deposits and recalibrated their games. The impact on the players is, therefore, minimal. The new normal has been defined, and the segment has moved on, and will continue to grow.
Talking about will retrospective GST liabilities could affect foreign investment, platform exits, or market consolidation Pherwani said, “Until the retrospective GST matter is fully resolved, there will naturally be a pause in foreign investment into India’s real money gaming sector. But we expect investments into casual gaming and esports to be significant.”
Over 1,000 game studios and a growing talent pool
According to the report, India is home to more than 1,000 game development companies and around 20 institutes offering degrees and diplomas in game development. The industry employs approximately 66,000 professionals, ranging from game designers to sound engineers and narrative writers.
The sector is expected to witness 7.6 percent employment growth by 2030, supported by increasing global outsourcing, rising investments in high-quality game production, and India’s expanding game developer base.
IPO potential: $26 billion in investor value ready to unlock
A separate report by WinZO Games and IEIC, , states that regulatory clarity could unlock $26 billion in investor value via gaming IPOs. As the industry scales to $9.1 billion by 2029, this could rise to $63 billion. Currently, Nazara Technologies is India’s only listed gaming company and commands among the highest valuation premiums globally.
