Game Monetisation in India: Understanding Free-to-Play, Advertising and In-App Purchases

Monetising a game in India is not a matter of copying a Western or East Asian model and lowering the prices. Indian players are numerous, engaged and increasingly willing to pay, but they pay in different ways and in different amounts. This article covers the main business models, how they affect player experience, and what studios need to get right on payments, advertising and ethics.

The market context

Lumikai's CY25 report, as reported by Outlook Respawn, put India's video games market (excluding real-money gaming) at $1.5 billion, up 17% year on year. It forecasts $3.2 billion by CY30, with in-app purchases growing at 19% a year and advertising at 13%.

Earlier figures are often quoted. Lumikai's FY24 report, via GamesBeat, valued the market at $3.8 billion, but that figure predates the 2025 ban on real-money gaming and included it. Real-money gaming alone was $2.3 billion before the ban. For studios making games for entertainment, the post-ban numbers are the relevant baseline.

Two more data points shape monetisation design:

• Payer conversion held steady at 25% in CY25
• Mid-core ARPPU was $15, against $3 for casual games

The main business models

Free-to-play with in-app purchases

This is the dominant model for mobile games in India. Players download for free and spend on currency, items, passes or cosmetics. It suits India's scale: Lumikai counted 148 million paying gamers in FY24, with ARPPU of $22.

Strengths:

• No barrier to trying the game
• Spend scales with engagement
• Works across a wide range of player incomes

Risks:

• Design that pushes too hard can damage trust and retention
• Price points copied from richer markets can put off first-time buyers

Advertising

Ad revenue matters in India because many players will never pay. Lumikai's FY24 report found 47% of users are ad-tolerant. In CY25, aggregate ad eCPM was $1.1 and rewarded ad eCPM was $2.43.

Low eCPMs mean advertising alone rarely supports a mid-core game. But as part of a hybrid model, ads can generate meaningful revenue from non-payers.

Hybrid models

Many free-to-play games combine IAP and ads, and Lumikai's forecast expects both revenue streams to keep growing. Payers get value from purchases. Non-payers see optional rewarded ads. Some games offer an ad-removal purchase as an easy first transaction.

Premium

Paid upfront games remain a small segment on Indian mobile, though PC and console players are more used to it. Android is about 90% of the market and PC and console are a few percent, so premium is a narrow path for most studios targeting India.

Getting payments right

Payment friction is one of the biggest causes of lost revenue in India. Lumikai's FY24 report found that 83% of Indian gamers prefer UPI or digital wallets. A purchase flow that defaults to cards will lose many players who wanted to pay.

What good looks like:

• UPI and popular wallets offered prominently in the purchase flow
• Fast checkout with as few steps as possible
• Clear confirmation and receipts so players trust the transaction
• Smooth handling of failed or pending payments, with automatic retries or refunds

Hypothesis to validate: Making UPI the default payment method may lift first-purchase conversion more than a price cut. Test both changes separately in your game.

Setting price points

With typical smartphones costing $200 to $400, many Indian players are careful with spend. Pricing should reflect that.

• Offer small entry-level packs to make the first purchase easy
• Use regional pricing, not direct currency conversion from US prices
• Consider low-cost recurring passes for steady value
• Show clearly what each purchase contains
• Avoid confusing layers of currency that hide real prices

Designing advertising well

Ads that interrupt play hurt retention. Ads that players choose can add value.

• Rewarded ads first: Let players opt in to watch ads for extra lives, currency or rewards. These also carry the highest eCPM.
• Interstitials with care: Place them at natural breaks, cap their frequency, and avoid them in the first sessions.
• Banners sparingly: They earn little and can clutter the screen.
• Respect data costs: Heavy video ads use mobile data, which matters for many players.
• Content quality: Filter ads that are inappropriate for your audience, especially in games played by younger players.

Hypothesis to validate: With weekly gaming time up 30% to 13 hours (Lumikai FY24), players may accept more rewarded ad opportunities per session than studios assume. Measure the effect on retention before increasing frequency.

Ethical monetisation

Trust is commercially valuable. Players who feel tricked leave and tell others.

• Publish drop rates and explain random reward systems clearly
• Avoid pressure tactics such as fake countdowns or misleading discounts
• Put limits and parental controls in place where children may play
• Make spending history easy to view
• Never let purchases create a pay-to-win imbalance that drives non-payers away

The regulatory line: online money games

The Promotion and Regulation of Online Gaming Act, 2025 received presidential assent on 22 August 2025. It prohibits offering, facilitating or advertising online money games, and related financial transactions. Penalties reach Rs 1 crore in fines or three years' imprisonment.

The Act defines online social games as those played for entertainment or skill development without monetary stakes. It also provides for an Authority on Online Gaming that can categorise and register games and platforms.

Standard IAP and ads in an entertainment game do not make it a money game. But studios should review any feature involving stakes and cash or cash-equivalent rewards, such as paid entry tournaments with prizes, cash-out options or tradeable items with real-world value. If in doubt, take legal advice before launch.

Monetisation checklist

• Chosen a business model that fits genre, audience and platform
• Used post-ban market figures for revenue planning
• Integrated UPI and digital wallets as primary payment options
• Tested checkout for speed and failure handling
• Set regional price points, including a low-cost first purchase
• Prioritised rewarded ads and capped interstitial frequency
• Published drop rates and avoided pressure tactics
• Added spending controls where younger players may play
• Reviewed all features against the Online Gaming Act, 2025
• Planned A/B tests for pricing, payments and ad frequency

Where GamerVault fits

GamerVault helps studios design monetisation for Indian players, from price points and payments to ad strategy and regulatory checks. We work with a small number of titles so each gets senior attention. If you are planning how your game will earn in India, we are happy to compare notes.