Gaming funding in India drops 68% as investors demand profitability

Tandon said AI is becoming a genuine differentiator in the screening process. “Studios using AI to cut development cycles, personalise live-ops, improve player retention and build large distribution moats are able to do more with leaner teams and tighter burn,” he said. That efficiency, combined with recurring revenue and engagement fundamentals, is becoming the new baseline for investor screening, Tandon said.

New funding structures are emerging alongside the pullback. Metasports Interactive secured $20 million in non-dilutive user-acquisition financing from London-based Metica to scale its cricket game Hitwicket globally, the companies said. Such targeted capital, which does not dilute equity, could become a more common route for studios that demonstrate strong unit economics, according to Tandon.

For India's gaming ecosystem, the funding reset may ultimately push studios toward global intellectual property and durable communities, the executives said. The $20 million Metasports deal offers one example of how capital is flowing to companies that can prove monetisation.