Israel's gaming industry blowing up: It's all fun and games!

  (photo credit: UNSPLASH)
(photo credit: UNSPLASH)

Israel has a place of choice in a gaming industry that generated over $176 billion in 2021. There are hundreds of startup companies based in Israel that offer gaming services all over the globe, from iOS and Android gaming apps to online casinos in Canada. These companies are versatile and contribute to a market that already makes more money per year than the cinema and music industry combined.

A Look at the Top Israeli Companies and What They Bring to the Table

Many factors can explain the success of these companies. First, many of these startups are created to bring forward innovations in one way or another. For instance, Blockium is a financial gaming app, it mixes elements of financial trading with a real money game. Since these two worlds, day trading and online gambling, share many similarities with notions of probability, risk, and reward. So mixing the two is bound to attract people on either side of the spectrum to it.

However, not all of these companies revolve around real money games, and many startups based in Israel offer social gaming services. One of them is Communix, a gaming company that puts emphasis on human connection. Other companies, like Buff, offer a platform where players are rewarded when they partake in games on their service.

You can also find Israeli startups with fresh ideas to advertise products on freemium mobile games, such as ODEEO. It provides in-game audio advertisement, which is an excellent initiative to promote a product or a game without being annoying to the player.

Yet, it's important to remember that most of these startups have an international aim and won't always offer their services locally because of the 5397-1977 penal law, which prohibits many games. As of today, in Israel, lotteries and some forms of betting are authorized, but they are strictly regulated by the National Lottery and the Israel Sports Betting Board (ISBB). If a citizen of Israel partakes in prohibited games, he risks a hefty fine and one year of imprisonment.

In practice, many Israelis still gamble online at offshore online casinos. Thankfully, these establishments operate with gaming licenses, so they offer secure environments to play with many self-exclusion measures.

All in all, Israeli companies are playing an important role in an industry that doesn't seem to experience any recession even when the other markets struggle. It's a hopeful prospect for the future, and the promise of many more innovations as entertainment is shifting more and more towards virtual worlds. No matter where you're from, you've probably benefited from the services of one of these startups without even realizing it.

An Ever-Expanding Industry

Israel’s gaming industry is quickly expanding in several domains, and it’s not limited to game development. Several companies are successful in distributing games or offering mobile solutions. Israeli companies are predominant in the mobile gaming industry, which heavily relies on microtransactions. This economic model is less affected by economic changes, and it benefited these companies during times when other sectors struggled.

However, the main challenge the Israeli industry faces revolves around expanding beyond the mobile gaming scene. Creating mobile software is cheap and easy, requiring only a small team to create and update the game, but a full-fledged video game that would be released on Pc or consoles requires more advanced programming, more employees, and thus more money. Even if they resort to participative funding, the time-window to produce a video game is so much longer, and it’s a risky next step for those who will venture into it.

A Man Power Issue

To evolve beyond the mobile sector, the Israeli industry requires manpower, and it’s one of the main issues they face. Many Israeli students are compelled to study abroad despite the creation of specialized schools like the Tiltan School. This school has only 170 students in programming out of the 700 currently attending its courses. Some companies struggle to recruit the employees they need for their project, and it’s a handicap that will need to be addressed to keep this industry growing in the coming years.

Gaming Is Also A Profession

Gaming isn’t only about programming or designing games, there’s a new generation of professional players that are very successful in Israel. For instance, Tal “Fly” Aizik is a professional DOTA 2 player ranked in the world’s top 30. His performances in esports competitions has earned him over $2.5 million so far. Israel currently has two gaming clubs, and they function like a regular sports club with funding to recruit and train players.

Even though the funds mainly come from commercial sponsorships, the potential to develop this area of the gaming industry is great. Esports competitions represent a chance for exposure to the country in the future and thus higher incomes. The gaming industry can create benefits in other areas such as tourism, or marketing for Israeli companies, since it panders to a younger demographic worldwide.

This article was written in cooperation with Casumo