Bitkraft Ventures, a US-based early-stage investor focused on gaming and interactive media, has announced that it will double down on investments in India, following the government's new online gaming law that has imposed a blanket ban on real-money games.
The firm, which has over $1 billion in assets under management across six funds, plans to increase its focus on gaming studios that are developing original titles for India and the global markets. It will also focus on gaming infrastructure and interactive media platforms for India and a global audience that use artificial intelligence (AI).
This move comes as Bitkraft expects five to six mobile games to surpass $100 million in annual in-app purchase (IAP) revenue in India by the end of 2025.
"That would represent a significant shift from a historically ad-dominated monetisation model – one that signals the arrival of India as a true top-tier IAP market," the firm said in its India thesis that was released on September 3.
"India’s gaming story began with jugaad – the act of patching together tools, teams, and tactics to thrive – and its next chapter is about turning those instincts into systems," it added.
Jens Hilgers, Founding General Partner, Bitkraft Ventures, said "With clear frameworks now in place, India is ready for patient capital and long-term thinking. It lays the foundation for a more trustworthy and enduring ecosystem with consumer protection at its core."
"This is the type of environment where globally competitive companies are born and we want to partner with Indian founders to make that happen," he added.
Bitkraft Ventures had hired Anuj Tandon, an industry veteran with over 15 years of experience, as its first partner in India to help establish its presence in the country in December 2024.
Indian startups in its portfolio include mobile game development studio Lila Games, mobile gaming platform Gamezop, tech-first global entertainment company Mythik, and social investment platform StockGro.
The firm had also recently led a $5.4 million pre-seed funding round into GameRamp, a startup that helps video games and consumer apps scale and monetise faster through AI. Globally, Bitkraft has more than 130 companies in its portfolio.
'Boosting investor confidence in India'
Tandon said the new law not only "enhances investor confidence but also creates a more stable and supportive environment" for institutional global investors like Bitkraft to pursue opportunities across game studios and interactive entertainment in India.
"It also puts India at par with a lot of mature global gaming markets like South Korea and China," he added.
India is the fastest-growing games market in Asia, both in terms of revenue and gamers, according to Niko Partners, a market research and consulting firm that covers video games, e-sports, and streaming in the continent.
The country's mobile, PC and console gaming market is expected to surpass $1 billion in revenue in 2025 and reach $1.4 billion in 2028, growing at a five-year compound annual growth rate (CAGR) of 11.1 percent, it said. These figures do not include revenues from real-money games or exports.
The RMG industry generated about $2.4 billion in revenue in FY24, accounting for a bulk of the revenues of India's overall gaming industry that stood at $3.8 billion for the year.
In its thesis, Bitkraft noted, "For a time, it appeared that RMG would serve as the monetisation wedge for Indian gaming. VC interest was high, regulatory pressure was muted, and growth was rapid,"
The firm stated that RMG demonstrated to Indian developers that monetisation is achievable when gameplay resonates with social status, habit loops, and local culture. Many paying users in India first encountered digital spending through fantasy sports or competitive skill games, though the model itself remained precarious.
"The question now is whether those same triggers can be reactivated within fully compliant, long term video game economies," it added.
Short-term headwinds, long-term winners
Looking ahead, Bitkraft anticipates that Indian studios building for India will be long-term winners as the development ecosystem evolves, even though there will be short-term headwinds. "While India’s gaming market deepens, we expect to see more local content replace global content as it did with other media formats," it said.
The firm also noted, "What Indians lack in spend-depth, they make up for in product loyalty, providing much needed liquidity to games that live and die by their multiplayer and social depth."
That said, India’s video games market is showing signs of increased maturity, particularly in player preferences and spending habits, Moneycontrol has previously reported, encouraging local studios to develop more ambitious and complex games.
Shooters continue to lead domestic consumer spending, driven by the immense popularity of titles such as Krafton's Battlegrounds Mobile India and Garena's Free Fire Max, which are currently the country’s highest-grossing apps. The firm said this phenomenon has inspired six to seven Indian gaming studios to develop their own mobile shooter games in the country.
Apart from shooters, strategy games like Clash of Clans, Evony and Whiteout Survival have also built loyal followings with up to 5.7 million daily active Indian users, Bitkraft noted.
What's driving growth in interactive media?
In the broader interactive media sector, which includes audio storytelling, regional video, live streaming, spiritual tech, fan platforms, and dating, Bitkraft expects content depth and distribution scale to define the next wave of growth in India.
"Platforms that cluster around genres, regions, or formats like serialised audio or dubbed anime will see higher retention, lower customer acquisition cost (CAC), and stronger monetisation, especially with microdramas leading the way," the firm said.
Micro dramas, short serialised dramas of one to two minutes designed for mobile viewing, are rapidly gaining popularity in India, Moneycontrol reported earlier. This surge has spurred the launch of more than a dozen apps from companies such as Kuku FM, Pocket FM, ShareChat, and Eloelo, all aiming to capitalise on the trend.
"The next 100 million users will not behave like the first. They are language-specific, payment-sensitive, and culturally distinct. Models that combine regional user experience with episodic monetisation (like Pocket FM), cross-format IP and high sub revenue (like Kuku), or diaspora-friendly dubbing (like Crunchyroll) are better placed to survive saturation," the firm stated.
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