The video game industry, which had only recently attracted a narrow circle of enthusiasts, had become a powerful sector of the modern economy and had become one of the drivers of digital development. Every year, the gaming industry sets new records in terms of revenue and number of attracted adherents. The gaming industry of Cyprus does not stand aside - the country is an active participant in the global digital trend.

GLOBAL VIDEO GAME MARKET

The digital gaming industry (including game development, production and promotion) is one of the fastest growing areas of computer technology and, at the same time, the global entertainment sector. The number of gamers is growing rapidly (2.5 billion players in 2019, in 2020 – 2.7 billion, 3 billion in 2021), and gaming itself is becoming a highpaying sport and profession. This doesn’t come as a surprise, as the leisure of a person under the influence of a number of factors moves into the virtual space.

The COVID-19 pandemic has had a positive impact on the gaming industry. In fact, from 2019 to 2021, the market grew cumulatively by 26 percent, reaching a record 191 billion U.S. dollars. The rapid growth was due to the fact that in most countries people had to spend a lot of time at home due to quarantine restrictions, and it was games that became a convenient way to diversify leisure.

Some facts: the global market of the gaming industry, according to Newzoo, for 2020 amounted to 179 billion, for 2021 – 192 billion, for 2022 is projected to reach 200 billion U.S. dollars.

In recent years, according to market experts, the portrait of the average gamer has changed – now it is a man – a resident of a large city, about 30 years old, with a permanent employment and an income above average.

The main driver of the market growth across the world is mobile, which will generate revenues of $103.5 billion this year. The forecast of experts consulting company PwC for the future development of gaming industry is optimistic.

CYPRUS GAMING INDUSTRY FORECAST: RATHER POSITIVE

Cyprus has traditionally been the center of international business, and an increasing number of technology companies and start-ups are choosing Cyprus for their jurisdiction. This is facilitated by the Government’s efforts to minimize bureaucratic procedures under British law on the island, as well as by more than 60 taxation agreements. According to some estimates, there are currently more than 300 companies operating in the gaming industry in Cyprus, including world-famous developers.

2022 was a challenging year for the Cyprus gaming industry. Among the negative factors are:
• the end of the COVID-19 pandemic and the subsequent decline in home-based leisure activities (1.2% decline in the global market);
• semiconductor shortage due to reduced production in Taiwan;
• the military conflict in Ukraine and the sanctions against Belarus and Russia.

A number of the largest Cypriot technology companies – game manufacturers have Russian or Belarusian roots, a significant part of the staff and offices before the war were located in these countries. European Union sanctions against Russia and Belarus forced owners of companies to close offices, reduce or relocate personnel, which affected the increase in costs. According to the Forbes report, up to 2,500 Russian developers have lost jobs in such studios as Plarium, MYTONA, Playgendary, Green Grey and Game Insight. Many of them had their headquarters in Cyprus.

INDUSTRY PROSPECTS

«The concept of digital development of Cyprus 2020-2030» provides for the creation of the most favorable conditions for the emergence and development of technology companies, including in the field of gaming.
Despite temporary fluctuations in the growth of the gaming industry, the following trends contribute to the industry prospects in Cyprus:

• the gaming industry is at the point of explosive growth, which meansthat the market has been consistentlygrowing for several years. Actively developing and cheaper tools access to virtual reality, metaverses. Citibankpredicts a metaverse growth of $13 billion until 2030;

• digitalization of leisure. Accordingto the Digital Economy and Society Index, 79% of the population of Cyprus regularly uses the Internet. The gaming industry has learned to adapt to any consumer, producing corresponding to the interests of each product;

• the gaming market does not exist in a confined space, it needs a certain ecosystem: business incubators for the developer communities, banking, government as well as tax infrastructure.

Proper use of state regulation, methods of stimulation of business and following current technological trends can bring Cyprus into the leaders of innovative industry of computer games.

Kiryl Shcharbinin
journalist,
Successful Business