Cyprus has broken into Europe’s ten largest video game industries by revenue, with more than 400 companies on the island generating an estimated €3.2 billion from games in 2025.

The finding comes from the first industry report published by the Cyprus Game Makers Association (CYGMA), which attempts to measure a sector that has expanded rapidly but remained largely absent from official statistics.

According to the report, 415 game studios and related companies were operating from Cyprus last year. Their mobile titles recorded about 615 million downloads, placing the island third worldwide behind China and Vietnam and ahead of the US.

Cyprus-based publishers released 571 new mobile games during the year, while the mobile segment as a whole generated an estimated €1.8bn. A further 36 PC and console titles were released, selling about 1.5 million copies, with total revenue from that part of the industry estimated at €1.4bn.

Most of the money, however, came from games already on the market. Titles launched during 2025 generated only about 4 per cent, €66m, of mobile revenue. Older games accounted for the remaining €1.72bn, showing how established titles can continue earning long after their initial release.

The figures refer to companies based in Cyprus rather than games created exclusively by Cypriot founders. The industry includes international publishers and studios that have relocated their headquarters or substantial parts of their operations to the island, including Wargaming, Outfit7, Nexters, Playrix and MY.GAMES.

Among the best-known titles linked to Cyprus are Wargaming’s World of Tanks, Outfit7’s My Talking Tom, Nexters’ Hero Wars, MY.GAMES’ War Robots and Gaijin Entertainment’s War Thunder.

That strength was already visible in a separate 2024 analysis, which found that seven of the world’s 100 largest mobile publishers by downloads were headquartered in Cyprus. Only the US and China had more, while four Cyprus-based publishers also ranked among the top 100 for in-app purchase revenue.

The expansion of the industry has been striking. The number of registered gaming companies rose from 169 in 2019 to 393 in 2024, while employment tripled from 1,438 to 4,320 people.

Over the same period, aggregate company turnover increased from €1.26bn to €4.35bn. The sector’s contribution to the economy climbed from about €300m, 1.3 per cent of GDP, to €1.15bn,  3.3 per cent.

The two headline revenue figures measure different things. The €4.35bn represents the combined turnover recorded by Cyprus-registered companies in 2024, while the €3.2bn is CYGMA’s estimate of revenue generated specifically from games in 2025.

That mobile-first character is also reflected in the company base. About 82.7 per cent of Cyprus-based businesses develop mobile games, with 57.5 per cent working exclusively in that market. Nearly three quarters employ fewer than 50 people, leaving the sector split between large international publishers and much smaller independent teams.

Cyprus ranked third globally for mobile downloads but 11th for mobile revenue. CYGMA said the difference reflected its strength in casual and hyper-casual games, which attract very large audiences but generally earn less from each download than titles popular in markets such as Japan and South Korea.

Viewed against the island’s population, the figures become still more remarkable. Cyprus has an estimated 415 gaming companies per million residents, compared with 48 in Finland, 17 in Spain and 15 in Serbia. Revenue per head stands at roughly €3,200, against €509 in Finland.

Andrey Ivashentsev, CYGMA’s general manager, said that “by all three measures, Cyprus is the most efficient video game development country in the world today”, referring to the number of companies, revenue and mobile installations per capita.

“This is not a future ambition,” he added. “It is the reality of the industry that already exists here.”

The report places that performance within a global games market worth an estimated $263.7bn in 2025, larger than the on-demand television, film and recorded music industries combined. Mobile accounted for about 61 per cent of the total.

Matias Myllyrinne, the former chief executive of Finnish developer Remedy Entertainment and former head of development at Wargaming, described games as “close to 99 per cent export” and the industry as a green sector because “the product ships over a wire”.

He said the sector builds software expertise that spreads into other areas of the economy, “from fintech to health tech to shipping”, adding that “a country that gets good at making games gets good at making software, and that capability does not leave when a single company does”.

The flow of investment offers further evidence of the sector’s scale. CYGMA identified €2.76bn in disclosed mergers and acquisitions and 21 exits since 2020, alongside €137m raised through 72 investment rounds.

Despite its small population, Cyprus accounted for 4.4 per cent of disclosed gaming acquisitions worldwide worth more than $10m and 2.5 per cent of global early-stage gaming funding rounds, according to the report.

Another €128.3m was committed through five user-acquisition financing facilities during 2025. This allows studios to finance the promotion of games that are already generating revenue without giving up a share of their ownership.

Theodoros Loukaidis, director general of the Research and Innovation Foundation (RIF), said Cyprus was “no longer simply building gaming companies” but “building a gaming ecosystem with increasing depth, maturity and global relevance”.

Part of the island’s appeal lies in its tax and business framework. Cyprus’ IP Box allows an 80 per cent deduction on qualifying profits from assets including copyrighted software. Following the rise in corporation tax to 15 per cent in January 2026, this produces an effective tax rate of about 3 per cent where the necessary conditions are met.

The country also offers a 120 per cent deduction on qualifying research and development expenditure, while tax incentives for skilled workers have helped studios recruit employees from abroad.

Deputy Research Minister Nicodemos Damianou said games were “no longer a niche” but among the most creative and demanding forms of technology, bringing together art, storytelling and engineering.

“This industry matters for Cyprus,” he said, noting that it could generate high-value employment, give young people opportunities to remain on the island and create knowledge that benefits the wider economy.

For all its commercial success, the sector faces a shortage of locally trained workers. Cyprus had 57,889 higher-education students in 2023/24, but CYGMA estimates that only 290 to 385 game-relevant graduates will emerge in 2026.

Of those, just three to six are expected to come through a dedicated gaming pathway, leaving studios able to recruit only around 10 to 40 local graduates a year.

CYGMA calculates that the industry could absorb between 100 and 300 junior recruits annually, suggesting that demand considerably exceeds the supply emerging from universities. Studios must also compete with fintech, foreign-exchange businesses, remote employers and overseas opportunities for the same pool of graduates.

The association said Cyprus has “no single, nationally recognised ‘front door’ bachelor’s degree fully dedicated to game-industry talent”, although some universities offer relevant courses and specialisations.

CYGMA itself was established in December 2025, when Cyprus remained the last EU member state without a dedicated trade body for the sector. Its founding members include Wargaming, Gaijin Entertainment, Owlcat Games, MY.GAMES, Helio Games and GDCy.

The association cautioned that its findings are informed estimates based on public data rather than audited results. The figures cover video game development and publishing only, excluding Cyprus’ separately regulated online gambling industry.