Zupee CEO Dilsher Malhi says gaming can power India’s digital economy—if monetisation scales, legal clarity improves, and culturally-rooted formats like Ludo can turn engagement into revenue.
Zupee operates in India’s real money gaming and skill-based casual gaming segment. (Source: prhandout)
Most people in India will spend hours playing a game. Few will spend even Rs 10 on it. That’s the contradiction gaming companies are trying to fix — and fast. Downloads are exploding, but revenue still lags behind. So what’s the fix? For some, it’s ads. For others, it’s real money gaming.
But here’s the thing -- the moment money enters the picture, so does the law. Is it a game of skill or just dressed-up gambling? Depends who you ask, and which court is listening. At a Zupee event, Dilsher Malhi, Founder and CEO of Zupee, offered an incisive snapshot of India’s gaming landscape, revealing the stark realities and future potential of a market still figuring out its economic footing.
Zupee operates in India’s real money gaming and skill-based casual gaming segment. Unlike fantasy sports or console gaming, Zupee focuses on familiar formats such as Ludo and trivia, combining entertainment with cash-based incentives.
Malhi pointed out a glaring disconnect that has defined India’s free-to-play (F2P) gaming ecosystem. PUBG, once a dominant download in India, accounting for nearly 35% of global downloads from the country, contributed less than 1% of its revenue from Indian users. This disparity underscores the challenge: high user volumes do not translate into proportional revenue.
The crux lies in India’s nascent micro-transaction culture. Unlike mature markets where players routinely spend on virtual items, India’s paying user base is still emerging, largely due to historically high price points set by foreign developers. The breakthrough arrived with UPI adoption, enabling affordable micro-payments, but the segment still generates under $1 billion annually despite a large user base.
Shifting focus to real money gaming (RMG), Malhi stressed its legal and operational distinction from F2P gaming. The industry hinges on the skill-versus-chance debate—an area historically muddled by subjective court rulings. Zupee has developed an objective, scientific framework to classify games based on dominant skill, aiming to cut through legal ambiguity and foster scalable innovation.
Within RMG, three segments stand out:
Fantasy sports with 150-200 million annual users, generating $1.2 to $1.5 billion in gross revenue.
Card games, notably rummy and poker, serve 40-50 million users and pull in $1.5 to $1.8 billion (rummy) and $300 to $400 million (poker).
Casual gaming, pioneered by Zupee, including games like Ludo and Snakes & Ladders, attracts 250-300 million users and is the largest user segment.
As Malhi pointed out, Zupee deliberately bypassed the crowded fantasy sports space, instead innovating within culturally rooted casual games by enhancing skill elements without alienating core fans.
Since its inception in 2018, incubated by Smile Group and backed by Matrix Partners, Zupee has scaled impressively. The company claims 30 million registered active users across 4,000+ cities, especially in tier 2 and 3 towns, and over 8.5 billion game plays.
FY24 marked a milestone: crossing Rs 1,000 crore in revenue with a profit after tax (PAT) of Rs 146 crore. This profitability sets Zupee apart in a sector often criticised for burning cash. Their approach focuses on product innovation, data-driven personalisation, disciplined expenses, and efficient growth strategies, avoiding layoffs despite industry turbulence.
Regulatory uncertainty remains gaming’s biggest hurdle. Malhi outlined how 2023 brought clarity: the Ministry of Electronics and IT (MeitY) emerged as the nodal regulator, GST was standardised at 28% on gross deposits, and tax deduction at source (TDS) on winnings was clarified.
However, with gambling a state subject and gaming’s regulatory status still evolving, uneven policies and tax structures create a cautious “wait and watch” environment among investors. Malhi advocates for a centralised, balanced regulatory framework that fosters innovation and responsible gaming.
Gaming is not just another entertainment vertical; it’s interactive engagement at scale. Malhi highlighted the sector’s potential to spawn an ecosystem akin to Flipkart’s impact on e-commerce—creating jobs, startups, and innovation hubs.
Currently employing between 500,000 and 700,000 professionals, the industry leverages top talent in data science, UX/UI, product management, and engineering to tackle technical challenges like latency and concurrency.
Zupee plans to reinvest profits to nurture the broader gaming ecosystem in India and expand globally. The company’s strategic focus on casual gaming over saturated categories reflects maturity and foresight.
Malhi’s message is clear: sustainable growth depends on balancing regulatory clarity with innovation, deep consumer insights, and disciplined financial management. As the market matures, those navigating this tightrope will shape the future of Indian gaming.
By continuing you agree to our Privacy Policy & Terms & Conditions
