VMPL
New Delhi [India], March 27: A year ago, microdramas barely registered as a category in India. Today they're a $300 million market.
That shift is playing out across every major format. A generation of mobile-first users is bypassing established media for formats that are interactive, personalised, and built for how they actually use their phones. The Lumikai State of India Interactive Media 2025 report maps the full picture.
Now in its fifth edition, the report is the longest-running annual analysis of India's interactive media economy. This year's findings: a $13.8 billion market expanding at 17% year-on-year across video, social media, games, animation/VFX, and audio, driven by 877 million smartphone users.
"Micro-dramas crossed $300 million in their first year. That tells you something fundamental about where Indian media is heading - toward formats that are mobile- native, interactive, and geared for a new generation of media consumers. The paradigm shift from search to social to video is well understood. The next shift with interactive media and AI is now underway in India." Salone Sehgal, Founder and Managing Partner, Lumikai
"The RMG ban didn't eliminate demand. Our research with VTION shows one in three former players migrated to offshore betting platforms - spending up to ₹10,000 a month with zero oversight, zero tax contribution, and zero consumer protection. Meanwhile, the rest of the market is healthy: video gaming grew 17% and is on track to cross $3 billion by 2030. The demand is real. The question is whether regulation channels it productively." Aditya Deshpande, Principal, Lumikai
Five Findings Shaping India's Interactive Ecosystem
1. Micro-dramas are the new OTT
Micro-drama platforms generated $300 million in their first year and are projected to reach $4.5 billion by 2030, with 91% growth expected in 2026.
One-minute serialised dramas built for vertical mobile screens generated more revenue in their first year of meaningful scalethan most OTT platforms managed in their first three, with 450Mn downloads and 100Mn MAUs. India's OTT video market currently stands at $4.9Bn. Micro-dramas are projected to approach that scale by 2030.
Micro-dramas are mobile-native, production-light, and optimised for the attention patterns of India's 877Mn smartphone users. For Indian audiences steeped in serialized storytelling, micro-dramas represent a mobile-native evolution of the TV drama shows.
2. India's free to play gaming market grew 17% tocross $1.5Bn
India's free-to-play gaming market grew 17% year-on-year to $1.5 billion in CY25, with ARPPU (Average Revenue Per Paying User) at $18, and is projected to reach $3.2 billion by 2030.
~555 million Indians played mobile games in 2025. One infour of them paid, generating $1.5 billion in revenue. That's a market on track to cross $3.2billion by 2030.
Despite a challenging regulatory year, India's revenue-to-download mix shows gamers generate 4.5x more revenue than non-gamers, comparable to global benchmarks. In-app purchases (IAP) are the fastest-growing revenue stream at 19% CAGR, with in-app advertising following at 13%. As real-money gaming is removed from the revenue mix, IAP revenue becomes a primary lever of monetisation.
3. One in three RMG users migrated to offshoreplatforms
One in three real-money gaming users has shifted tooffshore platforms, spending up to ₹10,000 per month in an unregulated, zero-tax environment.
India's Promotion and Regulation of Online Gaming Act, passed in August 2025, banned real- money gaming.Lumikai's primary research in conjunction with VTION, the consumer insights platform, estimates that approximately one in three erstwhile RMG players migrated to offshore betting platforms, spending up to ₹10,000 per month with no regulatory oversight, no consumer grievance mechanisms, and no tax contribution to the Indian exchequer.
A measurable rise in VPN-enabled browser usage among RMG users corroborates the shift. Banning did not eliminate demand, but it merely redirected it. The remaining majority redistributed time toward microdramas, audio platforms, and social entertainment, directly accelerating growth in those categories.
4. India's animation industry built Hollywood'sblockbusters. Now it's building its own.
India's $1.6 billion AVFX industry, which derives 80% of its revenue from international studios, is increasingly investing in original IP as AI reduces production timelines by 30-50%.
Indian animation titles like Mahavatar Narsimha ($40M global box office collections) and The Legend of Hanuman (~9.4M OTT views), along with the much awaited Baahubali: Eternal War, signal a growing audience appetite for made-in-India animated IP.
Four in five rupees earned by India's $1.6bn animation and VFX industry serve foreign productions. Increasingly, for the first time, domestic films like RRR, Brahmastra, Pathaan, and Tiger 3 show a surging domestic market as Indian filmmakers allocate 15 to 30 percent of production budgets to VFX. AI is now compressing production timelines by 30 to 50 percent, shifting India from a cost-arbitrage workforce to a speed-led, IP-capable competitor.
5. The niche is the new mass market i.e. astro and micro learning apps out monetise social media
Astro-devotional and micro learning platforms lead with$8.4 and $5.5 annual ARPU (Average Revenue PerUser) respectively despite smaller user bases, showing that intent-led categories monetise better than scale-driven platforms.
Astrology and devotional platforms like AstroTalk, SriMandir, and AstroYogi generate nearly 40% higher annual ARPU than social media, highlighting significantly stronger monetisation per user. High-trust, intent-driven verticals convert and retain paying users at rates that horizontal platforms cannot match.
Interactive and micro learning platforms like Duolingo, Seekho AI, Master AI by Eloelo and Supernova AI show the same pattern. They are emerging as a fast growing acquisition channel with 290M cumulative downloads in 2025 alone. The next generation of category winners in India will be built vertically, not horizontally. Interest and intent in a specific domain beats broad reach with shallow monetisation built for habit and boredom.
Report Access and Methodology
The full 36-page Lumikai State of India Interactive Media 2025 report is available at lumikai.com/report-2025. The report covers calendar year 2025 and is based on secondary research including data from third-party analytics platforms, third-party app data providers, annual company filings, and publicly available metrics. The report also incorporates primary research including a panel survey of 3K+ users, mobile usage data and behavioural insights from consumer intelligence platform VTION, and direct interviews with founders, operators, and investors across all five interactive media categories.
About Lumikai
Lumikai, combining the Latin word for 'light' with the Japanese word for 'tribe' is India's pioneering interactive media, digital platforms, and games VC. The fund backs early-stage founders building interactive media and digital platforms (streaming, social entertainment, audio, micro-dramas), driving innovation in games, developing cutting-edge technology (AR/VR, spatial computing, AI), and harnessing interactive mechanics to transform consumer experiences in education and skill development.
The firm has backed category leading companies including EloElo and Story TV (India's #1 social entertainment and short drama platform) Supernova (Top 5 educational apps inIndia), AutoVRse (India's fastest-growing enterprise VR company), Bombay Play (building casual games for the global market) among many others.
A seed stage investor, it also runs Lumikai Pixels, its pre-seed program for founders in their - 1 to 10 journey of building the next generation of interactive platforms. For more information, visit https://www.lumikai.com/.
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