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Insights into Indian Online Gaming and Pre-Seed Investment Thesis



The Indian online gaming industry has grown rapidly in the past decade. What was once a small hobby has become a big part of entertainment for many people. The industry is expected to reach $3.91 billion by 2025, with over 657 million gamers in India, thanks to cheaper smartphones and better internet access. This surge has caught the attention of both entrepreneurs and investors who see huge potential in the market.
Pre-seed investment thesis are crucial for helping new gaming startups get off the ground. These early funds, often ranging from $50,000 to $500,000, help startups cover their initial costs, improve their business plans, and create early versions of their games. In the fast-paced world of online gaming, getting pre-seed funding for startups can be the key to success.
This article looks at the booming Indian online gaming industry and the important role pre-seed investment thesis plays.

The Growth of the Indian Online Gaming Industry

Since the pandemic, India has become a popular gaming market with many downloads, even though revenue is still low. But this is changing with better games and local stories. India now has 444.4 million gamers, including 138 million who pay for games. The average gamer in India is expected to spend $6.38 in 2023. Most gamers, about 65% of the population, are under 35 years old, which is the best age group for video games.  
Indian gamers spend about 46 minutes a day playing online. The total money spent on gaming is expected to reach $1.50 billion. By 2026, India will have more than 1 billion smartphone users, making the market even bigger. Online payments are also easier now with the Unified Payments Interface (UPI), which many online games use.
Investing in Indian gaming is becoming more popular. Despite some slowdowns in 2022 and 2023, investors are still very interested. Over the last four years, investment in gaming has grown by about 32% each year. In 2022, the average investment deal was $3.4 million, though this was lower than in 2021. One big success story is Games 24×7, which became a unicorn company valued at $2.5 billion.
India now has over 500 gaming studios, showing many new companies are starting up. The government has also set up a special task force for Animation, Visual Effects, Gaming, and Comics (AVGC) and introduced new rules to help investors feel more confident. While Real Money Gaming (RMG) has been the main type of gaming investment, other types of games are expected to become more popular in 2024.

Key Drivers Behind This Growth

The Indian online gaming industry is growing fast because of several key factors:

Affordable Internet

The Internet in India is very cheap, costing just Rs 13.98 for 1GB of data. This low cost makes it easy for many people to play games online.

More Smartphones

By 2026, India is expected to have over 1 billion smartphone users. Affordable smartphones mean more people can play games.

Young Population

65% of Indians are under 35 years old. This age group loves playing video games, driving the demand for online gaming.

Pandemic Impact

During the COVID-19 pandemic, many people turned to online gaming for entertainment while staying at home. This increased the number of gamers and the time they spent playing.

Localised Content

Games with local stories and immersive gameplay are becoming more popular. These games attract more Indian players.

Improved Payment Systems

The rise of the Unified Payments Interface (UPI) has made online payments easy and safe. This encourages more people to buy things in games, boosting revenue.

Investor Interest

As the gaming market grows, more investors are interested. Despite some slowdowns in 2022 and 2023, investment in gaming has grown by about 32% each year over the last four years.

Emerging Trends in Gaming

The gaming industry is constantly evolving. Here are some emerging trends that are shaping the future of gaming:

Mobile Gaming

Mobile gaming continues to grow rapidly, especially in countries like India where smartphones are widely accessible. Games like PUBG Mobile and Free Fire are immensely popular.

Cloud Gaming

Cloud gaming services like Google Stadia, Xbox Cloud Gaming, and NVIDIA GeForce Now allow players to stream games without needing high-end hardware. This makes gaming more accessible to a broader audience.

Virtual Reality (VR) and Augmented Reality (AR)

VR and AR technologies are becoming more advanced and affordable. Games like Beat Saber (VR) and Pokémon Go (AR) offer immersive experiences that blend the virtual and real worlds.


Esports is becoming a major part of the gaming landscape, with professional leagues and tournaments attracting huge audiences. Games like League of Legends, Dota 2, and Counter-Strike are popular in the esports scene.

Cross-Platform Play

More games are supporting cross-platform play, allowing players on different devices (e.g., PC, console, mobile) to play together. This trend is making gaming more inclusive.

Blockchain and NFTs

Blockchain technology and Non-Fungible Tokens (NFTs) are entering the gaming space. Games like Axie Infinity use blockchain to allow players to own and trade in-game assets securely.

Challenges Facing Indian Gaming Startups

Indian gaming startups encounter several hurdles that affect their growth and success in the global market:

Regulatory Hurdles

Understanding and complying with gaming regulations, especially in areas like Real Money Gaming (RMG), can be complex and may impact game development strategies.

Monetization Struggles

Many Indian gamers prefer free-to-play games, making it challenging for startups to generate revenue through in-app purchases or ads. Finding the right balance between user acquisition and monetization is crucial.

Infrastructure Challenges

Despite increasing smartphone penetration, issues like internet connectivity and inconsistent mobile network quality can affect gameplay, particularly for online games.

Market Diversity

India’s diverse market with varying languages, cultures, and gaming preferences requires startups to localise their games and content, which adds complexity and costs.

Talent Acquisition

Recruiting skilled professionals in game development, design, and technology is difficult. Retaining talent amidst competition from established companies is also a concern.

How Early-Stage Funding Helps Startups Scale?

Early-stage funding plays a crucial role in the growth and scalability of startups in several ways:

Product Development

Funding helps startups build and improve their products or services. It covers costs for research, hiring talent, and refining prototypes.

Market Expansion

Startups use funds to reach new customers and markets. This includes marketing, user acquisition, and adapting products for different regions.

Team Building

Pre-seed investment thesis allows startups to hire skilled team members across sales, marketing, product development, and support, crucial for business execution.

Innovation and Differentiation

Startups innovate, enhance products, and explore new business models to stand out in competitive markets with financial support.

Financial Stability

Early funding provides stability, helping startups manage cash flow, navigate uncertainties, and reduce risks in early business stages.

Strategies for Securing Pre-Seed Investments

Securing pre-seed investments requires startups to adopt strategic approaches tailored to early-stage funding dynamics. Here are effective strategies to attract pre-seed capital:

Develop a Strong Business Idea

Start with a clear, innovative idea that solves a problem or meets a market need. Show how it can grow and succeed.

Build a Network

Connect with potential investors, mentors, and industry experts. Attend events and join startup communities to expand your network.

Create a Detailed Business Plan

Outline your vision, target market, competition, and financial plans clearly. Investors need to see a solid strategy.

Build a Prototype

Develop a prototype or MVP to demonstrate your idea works. Early customer feedback or sales can show potential.

Highlight Your Team

Showcase the skills and experience of your team. Investors want to see a capable group driving the business.

Show Market Demand

Provide proof of market interest with pilot projects, partnerships, or customer interest. It proves your idea has potential.

Be Honest and Professional

Build trust by being open about challenges and risks. Present yourself well during pitches and meetings.

Use Online Platforms and Networks

Explore online platforms and angel investor networks tailored to pre-seed funding. They can connect you with the right investors.

Stay Persistent

Getting funding takes time. Learn from rejections and keep refining your pitch and strategy.

Define Use of Funds Clearly

Explain how you’ll use the pre-seed investment thesis to reach milestones. Investors want to see a clear plan for growth.

Examples of Successful Gaming Startups That Benefited From Pre-Seed Funding

Pre-seed funding for startups has been pivotal for the success of several gaming startups. Here are some examples:

Moonfrog Labs

An Indian startup, Moonfrog Labs used pre-seed funding to launch popular games like Teen Patti Gold and Ludo Club in India. These games garnered massive popularity, contributing significantly to Moonfrog’s growth.


Another Indian startup, Octro, received pre-seed funding to develop games like Teen Patti and Indian Rummy, which gained wide popularity among Indian gamers.


Located in Mumbai, Games2win utilised early-stage funding to develop mobile games like Parking Frenzy and Fashion Diva, targeting the Indian audience.

Nazara Technologies

Headquartered in Mumbai, Nazara Technologies used pre-seed funding to expand its gaming portfolio, focusing on cricket, car racing, and simulation games.


In summary, the Indian online gaming industry is booming with opportunities due to cheap internet, many smartphone users, and a young player base. Startups benefit greatly from early investments to grow and innovate, despite challenges like rules and diverse markets.
As gaming trends evolve—like mobile and cloud gaming, virtual reality, and esports—the future looks bright. By investing early, we can fuel more growth and innovation in Indian gaming.

If you are a startup looking for some help with your funding, come pitch us at Eximius here