Chennai, Oct 29:
India’s video-game industry is expanding rapidly, but inadequate funding, limited publishing support and a shortage of industry-ready talent are preventing domestic studios from translating the growing player base into commercially successful games, according to a report by the Game Developer Association of India (GDAI).
The report, *GameDev Outlook 2026*, was released at the India Game Developer Conference at Chennai Trade Centre on Wednesday. It estimates that India’s video-game market generated $1.04 billion in revenue in 2025, registering year-on-year growth of 14.8% and reaching 511 million players.
Despite the expanding audience, annual revenue per user stood at just $2.04, highlighting the challenge of monetising India’s large gaming population. The report said the industry needed to bridge the gap between the number of players and the ability of domestic studios to develop commercially viable games that could compete in international markets.
Based on responses from 104 industry participants and 13 academic institutions, along with stakeholder consultations, the report found that 82.7% of surveyed studios prioritised launching new intellectual property (IP), while 49% planned to enter international markets.
Raising capital or securing publishing deals was a priority for 38.5% of respondents. However, 75% identified capital availability and publishing investment as major barriers to growth.
The talent gap poses another challenge. While 54.8% of surveyed studios planned to expand their teams over the next two years, 56.7% of industry respondents felt that fresh talent was poorly prepared or unprepared for production requirements. Further, 51.9% reported difficulties in attracting international partners.
GDAI chairperson Sridhar Muppidi said India’s young and diverse creative base offered a significant advantage, with studios showing strong ambitions to develop original intellectual property. He stressed the need for funding at every stage of game development and education focused on practical, team-based projects.
The report noted that 41.3% of industry submissions came from Tier-II and Tier-III locations, indicating that game development activity was spreading beyond major urban centres. It also pointed to opportunities in genres beyond battle royale games and observed that female participation was approaching half of the player base.
The Union Budget 2026-27 proposed ₹250 crore for content creator laboratories in 15,000 secondary schools and 500 colleges, a move that could help strengthen the creative talent pipeline.
PhonePe Appstore chief business officer Priya Narasimhan said user acquisition remained a major hurdle for gaming businesses. Understanding player behaviour and strengthening distribution would be important for studios seeking to reach and retain audiences.
The report called for coordinated action on financing, skills development, production capabilities, publishing support and market access to help Indian studios build sustainable businesses and establish a stronger presence in global gaming markets.