Bengaluru: Global gaming investment is entering a new phase as investors increasingly move away from growth-at-any-cost strategies and place greater emphasis on fundamentals such as stronger player retention, capital efficiency and sustainable monetisation.
While deal activity has contracted sharply, the underlying gaming opportunity remains strong and continues to grow.
For India, this reset could signal a shift from funding-led expansion towards a more mature investment ecosystem, where companies with real users, differentiated intellectual property (IP) and clear paths to profitability are better positioned to attract gaming investment.
India Gaming Market Crosses $1 Billion Revenue Mark
India’s gaming market crossed the $1 billion revenue mark in 2025, reaching approximately $1.04 billion and growing 14.8% year-on-year, according to the Niko Partners India Player Behavior & Market Insights Report 2026.
With a large and increasingly engaged player base, rising consumer spending and a growing pipeline of homegrown gaming companies, the market opportunity remains compelling even as investors become more disciplined about where and how they deploy capital.
This is contributing to a more selective approach to gaming investment, with greater attention being placed on the quality and sustainability of growth.
Industry leaders believe the reset represents one of the most significant changes in gaming investment strategy over the past decade.
The shift reflects the sector’s evolution from a hit-driven business into a maturing digital entertainment ecosystem.
This change is also reflected in Nazara Technologies’ recent $303 million acquisition of Bluetile and BestPlay, signalling the scaling of established gaming assets.
BITKRAFT Ventures continues to back gaming, gamified consumer applications, interactive media and AI-led opportunities globally and in India.
At the same time, new forms of targeted capital are emerging. Metasports Interactive secured $20 million in non-dilutive user-acquisition financing from London-based Metica to scale Hitwicket globally.
Together, these developments point to a more sophisticated funding landscape, where gaming investment is increasingly being matched to product maturity, growth efficiency and the specific economics of scaling a gaming business.
Retention Becomes Key Focus for Investors
Nitish Mittersain, Founder, Chief Executive Officer & Managing Director, Nazara Technologies, said, “The biggest change in gaming over the last few years is that growth alone is no longer enough. Companies that can consistently retain players, build communities around their products and create multiple engagement touchpoints are proving to be far more resilient businesses.
We are seeing a value shift from acquiring users to keeping them engaged over years through content, rewards and live experiences. That fundamentally changes how gaming businesses are built and scaled. The strongest gaming companies are building long-term player relationships rather than chasing short-term growth spikes.”
The emphasis on retention is reshaping gaming investment decisions as companies are increasingly expected to demonstrate the ability to maintain long-term engagement rather than simply generate rapid user acquisition.
For investors, this is also changing the role of technology in the gaming business. AI is increasingly being assessed not simply as a product feature, but as a means of improving development velocity, productivity and the economics of running a gaming company.
AI Emerges as a Differentiator in Gaming Investment
Anuj Tandon, Partner, Emerging Markets, BITKRAFT Ventures, stated, “What’s changed isn’t investor appetite for gaming, it’s the bar for what a fundable gaming business looks like. AI is now a genuine differentiator, not a buzzword.
Studios using AI to cut development cycles, personalize live-ops, improve player retention, and build large distribution moats are able to do more with leaner teams and tighter burn.
That efficiency, combined with strong recurring revenue and engagement fundamentals, is becoming the new baseline for investor screening.”
The growing use of AI is therefore becoming an important consideration in gaming investment, particularly as studios seek to improve productivity, reduce development cycles, personalise live operations and strengthen player retention.
The shift is already visible in the growing emphasis on user-acquisition efficiency and measurable product performance.
For companies that can demonstrate strong retention and monetisation, targeted capital such as UA (User Acquisition) funding is becoming an increasingly important route to scale.
Kashyap Reddy, Co-Founder and CEO, Metasports Interactive, added, “Building a game is becoming easier with AI; the harder part is creating a product that keeps players coming back and delivers sustainable economics.
Capital is increasingly following companies that can demonstrate strong product metrics, durable engagement and efficient growth. The shift towards UA funding is one reflection of this broader change.”
Gaming Investment Focuses on Efficient Growth
For India’s gaming ecosystem, the reset could ultimately strengthen the quality of companies being built. With the domestic market growing despite a significant regulatory transition, the opportunity is increasingly shifting towards studios and platforms capable of creating globally relevant IPs, building durable player communities and scaling with greater capital efficiency.
This environment is also changing how gaming investment is evaluated. Rising user-acquisition costs and the challenge of sustaining retention are pushing companies to demonstrate how consistently they can acquire, engage and monetise players.
Anurag Choudhary, Founder & CEO, Felicity, said, “For homegrown publishers, rising user acquisition costs and the challenge of sustaining retention are making efficient growth increasingly important.
Investors are therefore looking more closely at how consistently a business can acquire, engage and monetise players. AI is becoming an important enabler here, not just for lowering costs, but for helping studios build faster, operate leaner and deliver more personalised player experiences.”
As gaming continues to evolve into one of the world’s largest and most influential digital entertainment sectors, the gaming investment playbook is becoming increasingly clear: retention over downloads, profitability over scale-at-all-costs, and sustainable innovation over short-term momentum.
