Can interactive play be the next big growth story in digital media?

As India’s $9.3 billion digital media market matures, gaming and interactive media are emerging as the new engines of growth, turning play into purchase and entertainment into commerce.

India’s digital economy is entering a new chapter. What started as a market dominated by video streaming and social content has begun to evolve into something much larger. Gaming and interactive media now make up almost a fourth of India’s $9.3 billion Digital Media and Entertainment market. Together, they are expected to grow at a compound annual rate of 26 percent between FY25 and FY30, according to the latest report by BITKRAFT and Redseer India.

This shift signals a deeper transformation. Gaming is no longer just about entertainment. It has become one of the most dynamic ways for brands to engage consumers, drive commerce, and build communities. With 650 million gamers expected by 2026, a young population, and the world’s cheapest data plans, India is positioned to become one of the fastest-growing gaming economies in the world.

Akshat Rathee, Co-founder and Managing Director of NODWIN Gaming, points out that gaming provides one of the most effective end-to-end marketing platforms, as players spend extended periods in these environments and actively engage with branded elements.

Also read: India’s gaming and interactive media market set to triple by FY2030: Report

The business of play

By FY30, the gaming and interactive media market is projected to have grown from its FY25 valuation of 2.4 billion dollars to 7.8 billion dollars. Esports and digital gaming are propelling this market's growth. The business has undergone a structural reset as a result of the prohibition on online money gaming, with an emphasis now being placed on digital games, esports, and interactive formats.

Digital gaming alone is projected to grow at 18 percent annually and reach 4.4 billion dollars by FY30. Esports, which is now recognized as a skill-based sport, is also growing quickly and is predicted to increase by 27% annually. This change signifies a cleanup of the sector and a stage of maturation for developers and advertisers alike.

In terms of monetization, India is still a hybrid market, according to Rohit Agarwal, Director and Founder of marketing agency Alpha Zegus. In-app purchases like battle passes, cosmetics and advancement systems account for 55-65 percent of game revenue.  Brand integrations, sponsorships, and advertising provide the remaining funds. In casual and hyper-casual games, this ratio flips as ad-based monetisation dominates because average revenue per paying user is low, said Agarwal.

Brands that view gaming as a full-funnel opportunity are now bolstering this hybrid model.  In the past two years, as real money game spending declined and more companies began to support esports competitions, creative IPs, and in-game content, the ad side has experienced a significant increase.

Engagement that converts

What makes gaming valuable for marketers is its ability to convert attention into action. While streaming and social media drive awareness, gaming offers interaction. Players are in a participatory mindset. They are not scrolling but actively engaging. This difference makes the environment more suited to brand storytelling and commerce.

The average cost per engagement for creator-led game marketing is between two and six rupees. Gaming provides performance and engagement in one location, according to brands. New launch methods are starting to include in-game prizes, coupon drops, and creator-led content.

Akshat Rathee notes that gaming offers one of the most efficient full-funnel marketing opportunities. Players spend longer hours in gaming environments and willingly interact with branded mechanics. Rewarded ads, where users watch brand content in exchange for in-game benefits, have become a strong format. They are voluntary and therefore drive more positive engagement, he explained.

Gaming keeps people engaged, in contrast to OTT, where viewers ignore advertisements, or social media, where attention is ephemeral. Because consumers choose to engage, it increases recall and goodwill. This is why businesses are increasingly witnessing longer stay durations, greater conversion lift, and higher view-through rates from gaming-based efforts.

The rise of interactive commerce

Gaming’s journey from entertainment to commerce has been shaped by creators, sponsors, and virtual economies. For India’s top gaming creators and esports teams, brand-led monetisation now rivals or exceeds platform income.

Animesh Agarwal, co-founder and CEO of esoprts organization S8UL, says that a few years ago brands treated gaming activations as experiments. Today, they are part of regular marketing plans. Companies from FMCG, tech, banking, and lifestyle are working with gaming creators and esports IPs to reach younger audiences.

A new level of interactive commerce has emerged as a result of gaming's community-driven nature. Branded competitions, virtual goods, and in-game partnerships have evolved into venues where shopping and narrative coexist together. Customers interact with the companies within the game as well as the game itself.

In essence, every gaming moment is now a potential transaction. The player who collects a digital skin, redeems an in-game code, or buys through a creator stream is part of this new commerce loop. Gaming has become both a media and marketplace.

Regulation and readiness

The gaming industry’s transformation has been aided by regulatory clarity. The ban on online money gaming in 2025 shifted attention to digital and esports titles, which are now seen as brand-safe and compliant. The Online Gaming Act and the Promotion and Regulation of Online Gaming Act have created clearer boundaries between skill-based games, esports, and money gaming.

This has given advertisers more assurance. The National Sports Governance Act now recognizes esports, and digital games are seen as acceptable forms of entertainment. A cleaner, more regulated ecosystem that promotes long-term investment and ad planning is the end outcome.

At the same time, technology has become a powerful accelerator. The rise of generative AI is changing game design and storytelling. Developers use AI to build assets, characters, and in-game experiences faster and with more personalisation. Localisation is another growth engine. Games now come with regional language options like Hindi and Tamil, making them more relatable and expanding user retention beyond metros.

This combination of cultural familiarity, creative innovation, and policy clarity is driving the next phase of growth.

Culture as currency

India’s advantage in gaming goes beyond numbers. Its strength lies in storytelling and culture. Games inspired by Indian mythology, local folklore, and youth culture are finding success both at home and abroad. Titles like Raji: An Ancient Epic have shown that Indian stories can resonate globally when paired with world-class production values.

Rathee thinks that by combining low-cost innovation, market scale, and cultural narrative, India can become a worldwide leader. Compared to many other markets, developers here may produce more varied games at a cheaper cost and prototype more quickly. Local artists, on the other hand, provide a genuine voice that international titles frequently lack.

As Indian games start reaching international platforms, the country has a real opportunity to shift from being just a user market to becoming an exporter of interactive content and gaming IP.

The participation advantage

The biggest difference between gaming and other digital media is participation. Gaming turns users into active participants. That is why engagement in gaming is more authentic and memorable. Players spend time, interact with creators, and build communities around shared experiences.

Animesh Agarwal points out that this makes gaming-based campaigns more effective in the long run. A livestream or tournament integration delivers live reactions and real-time conversations that cannot be replicated on OTT or social media. Even when the cost per action looks similar, the quality of engagement is three to five times higher.

Brands are learning to measure this differently. Instead of only impressions or reach, success in gaming is measured through conversion lift, average order value, and retention. In this sense, gaming is not competing with social media or video. It is defining a new standard for digital engagement.

The infrastructure behind the boom

The foundation of India's gaming boom is affordability. The nation offers some of the most reasonably priced cellphones and one of the lowest data rates in the world. Massive adoption is being fueled by this accessibility. India will have more than 700 million smartphone users and over a billion internet users by FY30. Approximately one in five of the 500 million people who currently play at least one game do so for a fee.

By 2030, the number of paying gamers is expected to touch 230 million, more than double the current figure. This scale makes India one of the largest markets for gaming-based commerce globally. It also opens up opportunities for brands to reach engaged users across multiple price points and regions.

The road ahead

For the industry to achieve its full potential, a few things need to align. Measurement frameworks have to evolve so that agencies can compare gaming performance with other digital channels. Media planners need metrics such as viewability, time spent, and conversion lift that make gaming data compatible with platforms like YouTube or Meta.

Another gap is programmatic purchasing. Advertisers will find it simpler to purchase gaming inventory at scale as more brand-safe in-game inventory becomes available and SDK integrations grow. With this infrastructure in place, gaming may eventually account for a significant double-digit portion of digital advertising budgets.

Finally, creative innovation will drive growth. Branded tournaments, contextual product placements, creator-led mini-games, and avatar collaborations will push the industry toward repeatable formats that deliver measurable ROI. As these formats prove success, gaming will shift from being an experimental medium to a core pillar of media strategy.

Esports finds its footing

Esports, though smaller in size, is a critical piece of the puzzle. From 22 million dollars in FY21, the segment is expected to grow to 120 million dollars by FY30. Recognition by the government and strong sponsorship interest are helping esports evolve into a sustainable business. The combination of live-streaming, event participation, and fan engagement gives brands another way to tap into the gaming economy.

A more general shift in perception is also reflected in this rise. Nowadays, esports are viewed as professional, competitive entertainment rather than merely a pastime. It may soon rank among India's top digital exports as viewership grows and infrastructure gets better.

The new digital economy

The convergence of gaming and interactive media marks the beginning of a new phase for India’s digital economy. These platforms combine storytelling, community, and commerce in ways that traditional media never could. For brands, it is a chance to go beyond awareness and build direct relationships with consumers.

Gaming is no longer just about fun or competition. It is about how people spend time, discover products, and make purchases. As engagement turns into transaction, India’s next wave of digital growth will be driven by play itself.

In the years ahead, gaming and interactive media will not sit on the sidelines of advertising. They will be at the center of it, shaping how entertainment and commerce merge in the lives of a billion users.