OPINION | Online Gaming Bill Is A Win For Video Games, But Classification Confusion Still Clouds The Industry
By Harish Chengaiah
Much has been spoken and written about the Online Gaming Bill, 2025, but most commentary has focused solely on its impact on real-money games. This article aims to highlight what the Bill means for the video games (non-money games) industry, which is not banned but instead promoted by the legislation. (FYI: The Bill classifies games played purely for entertainment without wagering money as “Online Social Games.”)
Need For A Better Classification
For the last two years, the Indian video games industry’s primary demand has been recognition and categorisation as a distinct industry, separate from online money games. With this Bill, that demand has finally been met, and we welcome the Government of India’s move.
However, it must be noted that the term “Online Social Games” is a misnomer. Social games are only a subset of video games, used to describe multiplayer experiences with collaborative or competitive interaction. Single-player games are not “social,” and labelling all video games as such risks confusing international investors and the global gaming community.
In our previous representations, we stressed that our products should be categorised simply as “Video Games.” This term is accurate, globally recognised, and avoids ambiguity. While the Bill acknowledges non-money games, there is cautious optimism that they will ultimately be classified under the correct terminology, as the Bill mentions that there will be an effort to properly recognise and categorise non-money games.
Virtually No Negative Impact On the Video Games Industry
Many commentators have suggested that banning real-money games might sour investor sentiment and hurt the non-money gaming industry. This is a misconception.
Venture capital thrives on business models with recurring, scalable monetisation that can yield 50x to 100x returns within five to 10 years. Real-money games fit that investment thesis. By contrast, most video game genres do not, apart from multiplayer live-service games like BGMI. The COVID-19 boom briefly sparked VC interest, but most firms quickly realised the mismatch and pivoted from funding content development gaming companies to backing tech infrastructure companies in the gaming sphere, rebranding their “Gaming Funds” to “Interactive Media Funds.”
Video game businesses, meanwhile, rely on project-based financing from publishers rather than equity-based VC investment. A publisher typically funds development in exchange for recouping their investment plus a share of revenues. Since the Bill explicitly promotes non-money games, this deal flow remains unaffected. So the thought of lower investor confidence affecting the video games industry is a moot point.
Balancing Between Industry Promotion & User Safety
India’s video games market is still nascent. As of 2025, it is valued at just over $1 billion, with most revenues generated by international games. Domestic game companies are still in their early stages.
The Bill raises the possibility of introducing an India-specific content classification or age-rating framework. However, this is a premature regulatory consideration. Emerging markets typically adopt international standards such as the International Age Rating Coalition (IARC), which India currently follows. Ideally, this should remain in place for another 8 to 10 years before considering an India-specific framework.
The process of procuring a regional age rating certificate is a time-consuming affair and involves costs.
Given India’s relatively small market size, many international publishers may simply skip releasing their video games in India rather than seek local ratings, a move that would compound piracy habits. For domestic developers, this would add another compliance burden. These headwinds could slow down the growth rate of this nascent industry.
How, then, to safeguard consumers? The proposed Gaming Authority can instead focus on awareness campaigns, specifically:
- Educating consumers on how to spot and understand IARC age ratings on product listings.
- Promoting parental control tools that allow parents to set playtime and spending limits, block access, or enforce age restrictions.
Such measures strike a better balance, protecting consumers while enabling industry growth. Over time, coordinated centre-state campaigns could have a holistic positive impact.
The Need To Clean Up Classifications
At present, video games and real-money games share the same National Industrial Classification (NIC) code: 58203. This has been a persistent challenge for the video games industry.
Because money games are considered high-risk due to financial irregularities and consumer complaints, the RBI has instructed banks and payment gateways to restrict services for companies under this NIC code. As a result, video game companies face difficulties opening current accounts, conducting cross-border transactions, or accessing payment services.
Now that the Bill distinguishes money games from non-money games, the Government must create a separate NIC category for video games. This reform is critical to improve the ease of doing business and prevent the industry from being unfairly penalised for risks that do not apply to it.
(The author is the CEO of Outlier Games. He has also led several policy outreach initiatives for the games industry to the Govt.)
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