India’s Digital Entertainment Landscape

India’s digital entertainment landscape is evolving rapidly, with a notable rise in microdramas. Concurrently, stricter regulations surrounding real-money gaming (RMG) are encouraging users to turn to offshore platforms.

Growth of Interactive Media

According to Lumikai’s State of Interactive Media Report 2025, the interactive media market in India has become a $13.8 billion ecosystem that is expanding at a rate of 17% annually, driven by more than 877 million smartphone users. Microdrama platforms have already achieved over $300 million in revenue within their inaugural year, reaching more than 450 million downloads and boasting 100 million monthly active users.

The Future of Microdramas

The platforms are anticipated to develop into a $4.5 billion market by 2030. This growth illustrates a significant behavioural change; users are transitioning from passive consumption to engaging, bite-sized, and addictive content. Currently, microdramas provide 60 minutes of daily engagement, nearing on-demand viewing levels.

Shift in Real-Money Gaming

Another noteworthy aspect is the shift in real-money gaming. Following the enactment of the Promotion and Regulation of Online Gaming Act, 2025, nearly one in three RMG users has shifted to offshore betting platforms, spending up to Rs 10,000 a month without regulatory supervision, taxation, or consumer protections.

Impact on Digital Consumption

The report indicates a noticeable increase in the use of VPN-enabled browsers, along with heightened traffic to offshore platforms like Bet365 and 1xBet. This suggests that while demand has not dwindled, it has moved beyond India’s regulatory confines.

Interestingly, the remaining user base is not completely abandoning digital entertainment. Instead, their time is being redirected towards areas such as microdramas, social media, and free-to-play games, which are experiencing rapid growth.

Resilience of India’s Gaming Ecosystem

Excluding RMG, India’s gaming landscape remains robust. The market surpassed $1.5 billion in 2025, backed by 555 million gamers and a 25% payer conversion rate, with in-app purchases becoming the key monetisation strategy.

Focus on User Needs

A broader examination shows that platforms catering to specific user requirements are generating more revenue than larger, generic platforms. Apps focused on astrology and micro-learning earn more per user ($8.4 and $5.5 annually, respectively) compared to social media, despite smaller target audiences. This points to the likelihood that the next wave of significant digital enterprises in India will centre around enhanced user engagement rather than mere expansion.

The tightening of RMG regulation has led to a surprising outcome: it appears to be driving user spending into areas without domestic oversight rather than curtailing it. Furthermore, the emergence of microdramas highlights how simplified payment systems, particularly UPI autopay, are fostering frequent monetisation on a large scale. These trends reveal a pronounced shift, with growth increasingly influenced by payment convenience and regulatory loopholes, challenging companies and policymakers to adapt swiftly.