Freemium Game Economies

The GDAI whitepaper "Freemium Game Economies" examines the free-to-play commercial model in India and argues that it is a legitimate, widely adopted revenue structure that should not be conflated with gambling. Its central thesis is that closed-loop virtual economies, in which currency cannot be withdrawn, redeemed, or converted into real-world value, serve only to pace gameplay and enable progression, and therefore fall outside the "online money games" targeted by the Promotion and Regulation of Online Gaming Act, 2025 (PROGA). The paper situates free-to-play, which encompasses in-app purchases, advertising, sponsorships, and subscriptions, as generating roughly 75–80% of global mobile game revenue and as especially significant for democratising access and sustaining local Indian studios.

A key analytical contribution is the distinction between closed-loop and open-loop models. Closed-loop titles such as Candy Crush and BGMI are contrasted with real-money formats that are regulated under the RBI's payment-instrument licensing framework and the statutory definition of an online money game. To operationalise this boundary, the authors propose an "Exit Door Test," under which a game qualifies as an online money game only if a user pays to enter, expects a monetary return, and can extract real-world value from winnings. The paper cautions that a broad reading of "other stakes" would place many mainstream, compliant titles at risk of misclassification.

The whitepaper concludes that PROGA is a constructive step, but that regulatory classification should rest on clear principles rather than the mere presence of mechanics such as virtual currencies, progression systems, or in-app purchases. It recommends assessing whether a user stakes value with an expectation of return and whether that value is transferable or monetisable outside the game. Procedural safeguards are urged, including a published determination framework, pre-determination guidance, and due process and proportionality before any access is blocked. The authors further propose a technical working group bringing together OGAI, MIB, MeitY, and industry stakeholders, while acknowledging that concerns such as addiction and minors' access warrant separate attention.