Cyprus, a Mediterranean island of roughly one million people, has quietly transformed into one of Europe's most significant video game development and publishing centers. According to the Cyprus Video Game Industry Report 2025, released by the Cyprus Game Makers Association (CYGMA), the island now hosts more than 400 gaming companies that collectively generate around €3.2 billion in annual revenue from players worldwide.
The report paints a picture of an ecosystem that punches far above its weight, particularly in mobile gaming. With 415 confirmed companies, Cyprus accounts for about 7% of the European gaming industry's total company count—a remarkable share for such a small nation. Between 2019 and 2024, the number of Cypriot gaming firms grew from 169 to 393, an increase of 133%, or roughly 18% per year.
A global industry with a Cypriot foothold
The global video games market is estimated at $263.7 billion (€228 billion) for 2025, growing about 4% year-on-year. Video games now out-earn on-demand video, cinema, and recorded music combined, making them the world's largest entertainment sector. Cyprus's growth has been closely tied to the rise of mobile gaming, which overtook consoles around 2015 and surpassed PC and console combined by 2018. The free-to-play model—where games are free to install but monetized through in-app purchases—became the dominant revenue stream, and Cypriot companies were quick to capitalize.
The report also notes the growing influence of Asian, particularly Chinese, firms in mobile gaming, as well as a shift among some developers back toward premium PC titles. It highlights an increased focus on profitability following the layoffs and overexpansion seen during the pandemic era.
Cyprus's 'paradox': small market, global reach
What makes Cyprus's success remarkable is that its domestic market is almost irrelevant to the industry's output. The sector is inherently export-oriented—games are described as around 99% exportable—and the island's small population could never sustain such a scale. Instead, Cyprus serves as a base for creating, publishing, and monetizing digital products sold to a global audience.
The report puts revenue per capita at around €3,200, compared with €509 in Finland, €51 in Spain, and €32 in Serbia. In terms of gaming companies per million inhabitants, Cyprus reaches 415, versus 48 in Finland, 17 in Spain, and 15 in Serbia. These figures underscore that Cyprus is not merely an emerging destination but an established international hub.
Mobile gaming: the island's main strength
Mobile gaming is the cornerstone of Cyprus's industry. In 2025, Cypriot companies released 571 new mobile games, which amassed 615 million downloads. Total mobile gaming revenues are estimated at around €1.8 billion. Cyprus ranks third worldwide in mobile game downloads, behind only China and Vietnam, and 11th globally in mobile in-app purchase revenue. It outperforms the US, France, Israel, Turkey, Singapore, India, South Korea, and Japan in download volume.
PC and console: a solid second pillar
While mobile dominates, Cyprus's industry is not one-dimensional. PC and console games generate around €1.4 billion annually. In 2025, 36 new PC and console titles were released, with roughly 1.5 million copies sold. Of the total, about €200 million can be tracked via Steam, the leading PC distribution platform.
Why Cyprus? The IP Box effect
The report attributes Cyprus's rise to both the global mobile gaming boom and country-specific advantages. Chief among these is the IP Box tax regime, which offers reduced taxation on profits derived from intellectual property such as software and code. This regime has attracted numerous companies seeking a favorable base for their global operations.
The report also highlights Cyprus's strategic location at the crossroads of Europe, the Middle East, and Asia, as well as its EU membership, which provides access to the single market and a skilled, multilingual workforce. These factors, combined with a relatively low cost of doing business compared to Western European hubs, have made the island an attractive destination for gaming entrepreneurs.
As the global gaming industry continues to evolve, Cyprus's role seems set to grow. The report's authors argue that the island should no longer be viewed as a peripheral player but as a central node in Europe's gaming landscape. With its strong mobile focus and export-driven model, Cyprus has carved out a niche that few countries of its size can match.
