Gaming bill a double-edged sword for Esports, offers relief and sponsorship gap

Chennai: India's esports sector is searching for sustainable monetisation models after new gaming rules gave it formal recognition but also eliminated real-money gaming companies that were among its biggest sponsors. The rules, effective May 1, separate esports from money gaming for the first time, bringing regulatory clarity and ending the negative perception that had kept mainstream brands away. But they also contributed to a 7.5% revenue decline in 2025, according to a FICCI-EY report, as RMG firms that bankrolled tournaments exited overnight. A pullback by global sponsors due to the broader economic slowdown added to the decline. However, professional tournaments, participation, teams and titles grew and are expected to grow in 2026.Industry executives believe the setback is temporary. Growing popularity of competitive gaming in tier-II and tier-III cities, policy support from state and central governments as part of job creation and global game publishers looking to promote titles in India are expected to drive growth and attract consumer brands and investors.Karan Pathak, associate director of esports at Krafton India, said viewership, sponsorship and ticket sales are rising. "There has been interest most significantly from smartphone and tech OEMs aligned with esports such as headphone companies. But I think there is a growing interest from consumer companies," he said. Krafton, which publishes the popular mobile game BGMI, has built a structured tournament system and stepped up prize pools and outreach to smaller cities to promote its game. Gautam Virk, co-founder and chief executive at NODWIN Gaming, a company hosting esports tournaments, said global publishers are eyeing India as gamer numbers grow. "A lot of publishers have realised that being in India and having an India outlook is really key for any game to grow. That is attracting developers and publishers here. Many already have an increased presence for promoting esports and are running game development incubation programmes," he said. Virk added that while mobile games dominate, newer genres and PC gaming are seeing increased adoption, with non-gadget brands participating to target younger demographics.Rajan Navani, chief executive of JetSynthesys and president of CII's Indian Digital Gaming Society, said growth momentum is bringing gaming companies and brand sponsorships but acknowledged it is in early stages. He believes monetisation will come from integrating tournament IPs, IPL-style franchise leagues, athlete digital rights and creator content rather than relying on sponsorship alone. "Instead of treating esports as an extension of marketing for games, we think of the franchise model to create IPL-like value," he said.The FICCI-EY report projects a rebound from 2026, driven by regulatory frameworks and initiatives at the state and national level. Cumulatively, video games and esports are projected to grow from Rs 63 billion in 2025 to Rs 92 billion by 2028.
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