In the wake of sweeping regulatory changes in India’s online gaming sector, Delhi-NCR based startup Zupee has had to rapidly realign its business. Once focused on real-money skill-gaming, the company now finds itself reinventing across content, subscriptions and esports to navigate the aftermath of the new legislation.
The Regulatory Shock and Its Impact
India’s parliament approved the Promotion and Regulation of Online Gaming Act, 2025, which bans all forms of real-money gaming (RMG) in the country — whether based on skill, chance or hybrid models. The Times of India+2TechCrunch+2 Under the new framework, financial transactions for real-money games are blocked, advertising of such games is banned, and civil-and-criminal penalties (including fines and imprisonment) apply for non-compliance. MEDIANAMA+1
As this regulatory storm gathered, many gaming platforms began shutting down their RMG operations. Zupee was among them. TechCrunch+2The Times of India+2 The company confirmed it would stop paid games and continue only free-to-play titles such as Ludo Supreme and Snakes & Ladders. The Times of India+1
Immediate Fallout: Revenue Pressure and Workforce Cuts
Prior to the ban, Zupee had achieved strong metrics: in FY24 it reported a profit after tax of ₹146 crore, and revenue of ₹1,123 crore, up 36.5 % year-on-year. Moneycontrol+1 However, with its core RMG offering rendered illegal, the company faced not just a revenue challenge but a strategic one: how to keep its user base engaged, how to monetise without direct gaming bets, and how to pivot in a hurry.
In response, Zupee laid off approximately 170 employees — around 30 % of its workforce — as part of a restructuring exercise. The company offered support packages including up to six months’ pay for senior employees, extended health insurance and access to a ₹1 crore medical support fund. Inc42 Media
New Strategy: Micro-Dramas, Subscriptions and Esports
Faced with a seismic shift, Zupee moved on multiple fronts to transform its business.
1. Micro-drama content platform (Zupee Studio):
Zupee launched a short-form video content platform offering 1-3 minute bite-sized episodes across genres such as romance, thriller, comedy and drama. Initially available for select Android users, iOS rollout is in the works. Business Standard+1 This move aligns with the rising popularity of micro-content in India and gives Zupee a monetisable model through ads and subscriptions. As the company put it: “This is just the first of many new experiences we aim to create for our audiences.” — CEO Dilsher Singh Malhi. Moneycontrol+1
2. Subscription model (Zupee Plus):
To lessen reliance on ad-revenues alone, Zupee introduced a paid subscription service priced at ₹499 for three months, offering access to ad-free games along with the new shows. Moneycontrol+1 This hybrid strategy aims to smooth revenue volatility and build a recurring-income segment.
3. Esports and social games pivot:
On the gaming front, the company is shifting from purely paid contests to ad-supported social games and aims to reimagine traditional Indian games like Ludo, Carrom and Chess as global esports formats. This includes building out design, engineering and community teams, and embracing technologies such as AR/VR and streaming. Moneycontrol The goal: position Indian mobile gaming heritage as a global export and tap into the massive potential of India’s ~750 million internet users.
Why This Pivot Matters
Zupee’s transformation highlights several broader themes:
- Regulatory disruption in growth sectors: The RMG ban forced an abrupt change of direction for an industry that had grown rapidly. When a regulatory pillar is removed, the need to pivot fast becomes existential.
- Diversification of monetisation models: As direct monetisation via cash contests was shut down, the company quickly moved to ad-supported content and subscriptions — a clear signal that building recurring and diversified revenue streams is crucial.
- Leveraging existing user base and infrastructure: With over 150 million registered users prior to the shift, Zupee already had scale and engagement — valuable assets as it expands into content and social gaming. Business Standard+1
- Localization + global ambition: By focusing on India’s cultural game formats while building global-friendly esports and content IPs, the startup is aiming for both domestic resilience and international growth potential.
Risks and Challenges Ahead
While the pivot is bold, several challenges remain:
- Content competition: The short-video format is crowded, with established players and new entrants all vying for attention and ad-dollars. Standing out in this market will demand strong content and marketing.
- Subscription uptake in price-sensitive market: Convincing users to pay ₹499 for three months may be harder in a cost-sensitive, ad-driven landscape unless value proposition is compelling and stickiness is high.
- Transitioning to esports monetisation: Building an esports ecosystem — from tournaments to broadcasting to sponsorships — takes time, and monetisation is still nascent in India compared to developed markets.
- Regulatory vigilance remains: Even as real-money gaming is banned domestically, regulatory scrutiny on adjacent models (ad-games, subscriptions, influencer marketing) remains high. Platforms must be careful not to cross regulatory lines in new models. MEDIANAMA
A Calculated Reinvention
Zupee’s story is one of rapid adaptation. The company went from being a high-growth gaming startup riding cash-based contests to a diversified entertainment brand focusing on short videos, subscriptions and social/esports gaming. Its management has acknowledged the tough decision to restructure and pivot, but also emphasised that this is their “long-term vision” for entertainment in India. Moneycontrol+1
By repurposing its user-base, app infrastructure and gaming IP, Zupee is attempting to turn regulatory adversity into strategic opportunity. If executed well, the company could emerge not just as a survivor of the RMG ban but as a new kind of consumer-entertainment platform.
Outlook: What to Watch
In the coming months, key performance indicators for Zupee will include:
- Growth in subscription numbers and ARPU (average revenue per user) from Zupee Plus.
- Engagement metrics for the micro-dramas: user retention, watch time, episode roll-out pace.
- Monetisation success of ad-supported social games and how quickly the esports ecosystem matures.
- International expansion plans (if any) for its content and gaming formats, and how it leverages India’s talent and scale.
- Competitive moves by other RMG-era companies shifting to similar models (micro-content, subscriptions, esports) — how crowded the space becomes and how differentiation matters.
In short: Zupee’s transformation is emblematic of how startups must remain nimble in highly regulated, fast-changing markets. The road ahead will be challenging, but the pivot could redefine the company for a new era.
