Staff Report
The numbers are striking. A small island nation, Cyprus, home to approximately one million people, has quietly become a significant force in the global video game industry, generating an estimated €3.2 billion in annual revenue from players worldwide. This remarkable growth is detailed in the Cyprus Video Game Industry Report 2025, presented by the Cyprus Game Makers Association (CYGMA), which positions the country not as an emerging player, but as an established international hub. With over 400 companies now operating within its borders, Cyprus contributes substantially to the global market, which is projected to reach $263.7 billion in 2025, making video games the largest entertainment sector, surpassing the combined revenues of on-demand video, cinema, and recorded music.
This transformation began largely with the explosion of mobile gaming. Around 2015, mobile platforms overtook consoles, and by 2018, they had surpassed PC and console gaming combined, driven by the free-to-play model where installation is free but monetization occurs within the game. Cypriot companies capitalized on this shift, with the industry releasing 571 new mobile games in 2025 alone, accumulating 615 million downloads and an estimated €1.8 billion in mobile gaming revenues. This success places Cyprus third globally in mobile game downloads, behind only China and Vietnam, and eleventh worldwide in mobile in-app purchase revenue, outperforming larger nations like the United States, France, and Japan. The sector’s output is overwhelmingly export-oriented, with virtually none of its revenue dependent on the domestic Cypriot market.
Beyond mobile, the Cypriot industry also sees substantial activity in PC and console gaming, contributing approximately €1.4 billion annually. In 2025, 36 new PC and console games were released, selling about 1.5 million copies. The report highlights Cyprus’s exceptional standing within Europe; while the continent’s industry comprises around 6,000 studios and publishers, Cyprus alone boasts 415 confirmed gaming companies. This means the country accounts for about 7% of Europe’s total gaming companies, an exceptionally high share given its population. This growth has been rapid, with the number of Cypriot gaming companies surging from 169 in 2019 to 393 in 2024, representing a 133% increase. CYGMA even ranks Cyprus among the top ten European countries by revenue, indicating not just high per capita performance, but a significant absolute presence.
Several factors have underpinned this rapid expansion. The global rise of mobile gaming provided fertile ground, but Cyprus also offered specific advantages. A key draw has been the IP Box, a tax regime that offers lower taxation on profits derived from intellectual property, such as software and game code. From 2026, qualifying profits could be taxed at an effective rate of around 3%. Additionally, companies benefit from enhanced tax deductions for research and development and incentives for executives relocating to the island. Beyond fiscal benefits, Cyprus’s EU membership, a legal system based on English law, extensive tax agreements, and its strategic geographical location between Europe, the Middle East, and Asia have all contributed to its appeal as a business base.
Despite its impressive trajectory, the report identifies challenges, particularly regarding talent. While Cyprus has 13 universities and nearly 58,000 students, relatively few pursue degrees directly applicable to game development. Forecasts suggest only 290-385 graduates in 2026 will come from relevant programs like programming and design, with a mere 3-6 specifically from game development degrees. This creates a significant gap, as the sector is estimated to require 100-300 new employees annually. Furthermore, unlike some European counterparts, Cyprus currently lacks a well-developed system of state grants specifically for the video games industry, suggesting room for more direct financial support to complement its competitive tax and company formation policies.
