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- Gaming in India Just Changed. Non-RMG Is the Playbook.
Gaming in India Just Changed. Non-RMG Is the Playbook.
Decode the most important shifts in India's consumer economy with Lightbox
Team Lightbox
August 23, 2025
☕🗞️ Good morning! Welcome to The Brief, Edition #15
India moved to ban real-money gaming this week, bringing a new law into effect almost overnight. The implications are massive. Big wins for non-real money gaming and esports. The playbooks for success in gaming in India are being rewritten even as we pen this week’s newsletter.
Before we dive in, a quick introduction to who we are.
Lightbox is a Mumbai-born venture capital firm focused on technology-led consumer businesses. Over the past decade we’ve employed a concentrated portfolio construction and deep operational engagement to enable our portfolio companies and limited partners to navigate this market.
India is moving steadily towards becoming a $10 trillion economy, driven by rising consumption and digital adoption. We believe we are uniquely positioned to offer a front-row seat to the most important shifts in the country’s consumer markets. If you’re a global capital allocator, family office, UHNI, or strategic investor looking to participate in the India opportunity — this newsletter is for you.
Let’s get into it.
📡 Signals
India’s Non-Real Money Gaming Moment
The past couple of days compressed a multi-year debate into a week. India’s move against money-based online games took revenues to zero overnight for wagering-led operators. The outcome looks blunt, but the direction was predictable.
What’s changed and what remains the same
What’s changed is the immediate wipe-out of real-money gaming revenues. What hasn’t changed is the state’s posture toward gaming as entertainment and sport. Esports has formal recognition; ministers repeatedly speak about India as a future gaming hub. The investable universe shifts toward building, distributing and monetising games without stakes.
The short-term fallout is straightforward. Larger operators with capital will pivot to friendlier geographies, try free-to-play variants, or explore adjacent products. Smaller, ops-heavy teams will bear the brunt in jobs and working capital. None of this is surprising; the surprise was how quickly it landed.
The non-RMG opportunity is real but hard
Watch: Rooter founder Piyush Kumar and Lightbox’s Sandeep Murthy break down the new law and its implications for non-RMG
In non-RMG, the prize sits with publishing: owning IP and monetising via in-app purchases (IAP). That’s where value concentrates. But it’s a long-cycle, hit-driven, license-intensive business. Even efforts from well funded Indian gaming companies have struggled to produce breakout titles. The gap is investable, but it requires patient capital, senior creative and technical talent and credible rights.
Distribution and infrastructure are nearer-term. Creator tools, streaming tech, fraud-resistant payments, third-party storefronts for IAP, and exclusive India distribution deals for global titles all sit in the money-making middle. These are less binary than game hits and can compound defensibly if you control pipes to both publishers and players.
Rooter: A monetisation path that works
Advertising alone hasn’t supported India-scale gaming platforms. What has started to work is selling in-game currency at scale, by building direct integrations with publishers and a frictionless checkout. With UPI normalising micro-transactions, consumers are comfortable paying Rs 50–Rs 200 frequently when the value is obvious.
There’s a second-order tailwind: tens of millions who previously spent on money games won’t all disappear. Even a modest migration into mainstream gaming lifts IAP volumes. Pair that with product features that deliver unique value to both gamers and publishers, and you unlock two more revenue legs — subscription and higher-yield, context-rich advertising.
How capital allocators should approach gaming in India
Don’t make “all-or-nothing” bets on regulation. If a business depends on unclear rules, treat it like a special case: write a smaller cheque, plan for the downside, and aim to get your money back faster.
Invest in the plumbing. Payments, identity, fraud control and in-app storefronts are used by many games. They’re safer, carry across publishers, and handle rule changes better.
Back distribution before you back hits. Exclusive India distribution and community-led discovery can make cash now while you build optionality in publishing later.
Secure rights—especially in sports. Cricket is the big, underused asset. Rights, data access and real production partners separate talk from traction.
Choose patient builders. Non-RMG takes time to pay off. Prefer lean teams with software moats and proven unit economics from paying users—not big DAU numbers with weak monetization.
Bottom line: India hasn’t turned anti-gaming; it has drawn a bright line against wagering. The winners now will be the teams that pair patient product cycles with ruthless monetisation.
📰 News
Dream11, MPL Line Up Pivots; A New Fund for AI-Native Startups
Dream11 founders Harsh Jain and Bhavit Sheth. Image credit: Dream11/ Harsh Jain
Leading gaming platforms, including Dream11, PokerBaazi and Mobile Premier League have suspended real-money gaming operations following the passage of the Promotion and Regulation of Online Gaming Act, 2025, which bans online games that involve financial stakes, along with related advertising and payment facilitation.
Dream11 has shifted entirely to a free-to-play social model, discontinuing all paid contests to align with the new regulatory framework.
The sweeping ban has rocked the fantasy gaming ecosystem, previously projected to grow into a $3.6 billion market by 2029, raising alarms over investor pullbacks, mass layoffs, and potential shutdowns of major platforms. Industry players are preparing legal challenges, arguing that skill-based games like poker were unfairly swept into the ban.
Bengaluru-based B2B seafood supply chain company Captain Fresh has confidentially filed its draft red herring prospectus with SEBI, aiming to raise Rs 1,700 crore (approx. $200 million) via a fresh equity issue in its upcoming IPO. The company recently converted into a public limited entity. Founded in 2019, Captain Fresh helps businesses procure, process, and distribute fresh seafood. In FY24, its gross revenue surged 71% to Rs 1,395 crore, while net loss narrowed 22% to Rs 229 crore.
Natasha Malpani, formerly a partner at KAE Capital, has launched Boundless Ventures, an early-stage venture capital fund with a Rs 200 crore ($23 million) corpus dedicated to supporting India’s AI-native founders.
Investment focus: Pre-seed and seed rounds across the AI stack—including consumer AI, AI infrastructure, agent tooling, vertical applications (like healthcare and logistics), make-in-India hardware, and deep-tech.
Deployment details: The fund has already backed SuperHealth (healthcare delivery), Armatrix (industrial automation), Piersight (ocean intelligence via satellites), Knot (AI-powered fashion discovery and logistics), and two stealth-mode startups.
Cheque size: Initial investments range between $200K–$400K, with reserves for follow-on funding.
Boundless is designed to offer not just capital, but also narrative support and global networks — aiming to back AI innovators ahead of the curve.
R for Rabbit, a D2C baby products brand, has raised $27 million in its Series B funding round, comprising both primary and secondary components. The round was led by Filter Capital and co-led by 3one4 Capital, enabling an exit for early investor Xponentia Capital. Since FY2021, R for Rabbit has sustained a CAGR of over 35%, with its annual run rate (ARR) for FY25 projected to exceed $30 million. The company plans to deploy the new capital to scale its omnichannel distribution, drive product innovation and enhance digital initiatives in India’s premium baby care sector.
Secondaries focused fund PixelSky Capital has raised Rs 150 crore in its first close, aiming for a Rs 400 crore corpus. Backed by IndigoEdge and Yumlane founder Hitesh Ahuja, the fund has already invested in Purplle and Porter and plans 3 more deals in coming quarters. It will focus on late-stage, near-profitability startups valued at $300M–$1.5B, especially those eyeing IPOs by 2026–27. LPs include the Kothari family (DSP Group), India Quotient’s Anand Lunia, and Sony TV cofounder Jayesh Parekh.
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