Gaming funding contracts in face of investor demand for sustainable monetisation
Dubbing the move as a ‘reset,’ industry representatives urge fraternity to focus on long-term player relationships rather than chasing short-term growth spike
Investors in the gaming industry are demanding stronger retention, capital efficiency and sustainable monetisation from gaming companies. This shift has led to a funding reset, with deal sizes contracting globally. Despite this, the market for gaming revenue has grown to $1 billion in 2025. In India, funding for gaming companies dropped from $133 million in 2025 to $42.5 million in 2026.
Industry leaders view this as a significant change in gaming investment strategy over the past decade. Companies that can assure profitability, retain players and build engaged communities are proving more resilient and attracting investor trust. New forms of targeted capital, such as user-acquisition financing, are emerging to support these companies.
The role of technology, particularly AI, is also evolving in the gaming business. Companies using AI to improve development velocity, personalise live-ops, and enhance player retention are better positioned to scale with leaner teams and tighter burn rates. This shift in investment strategy could ultimately strengthen the quality of companies being built in India's gaming ecosystem, as the domestic market continues to grow despite regulatory changes.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
