Iran's Gaming Industry: Global Potential Under Siege by Economic Barriers

Isfahan - Video game industry figures at the Manavin Tax session discussed production and export experiences, media activity and esports, and spoke about investment barriers and the industry's internet restrictions.

Ambassador of Arjan Group of Provinces, Korosh Dibaj: The computer game industry in the digital economy is not just an entertainment field; It includes a chain of cultural content production, investment, export of digital products, marketing, specialized media activity, professional competitions and creation of job opportunities. The economic value of this industry is not limited to the sale of the final product, but depends on the link between game makers, investors, publishers, media, communication infrastructure, international markets and electronic sports; The links that the weakness of each link can affect the development path of other sectors.

In Iran, despite the capacity of specialized manpower, access to a wide audience market and the successful experience of some manufacturers in supplying products to international markets, the activists of this industry talk about obstacles such as lack of effective investment, non-payment of promised support, difficulty of operating in global markets, internet limitations, weak economy of specialized media and lack of sustainable mechanisms for the development of electronic sports.

The experience of activists in this field shows that the issue of gaming economy in Iran, in addition to providing financial resources for production, is also tied to how to support independent businesses, access to international distribution networks, maintain content independence, strengthen specialized media and provide the possibility of continuous participation in global competitions. These issues were discussed in the Manvin Tax meeting titled the place of the game industry in the country's economy; The meeting was held under the initiative of the Presidential Vice President for Science, Technology and Knowledge-Based Economy on the sidelines of the Manvin Creative Industries National Event in Isfahan.

investment without involvement in content; The experience that Iranian game makers narrate from foreign support

Mehdi Sadri, an activist in the field of computer games, pointed to the missing links in the economic structure of this industry and stated: One of the serious deficiencies of the game industry in Iran is the lack of effective financial support and investment mechanisms. Events, support programs and investments can be more effective when they are placed together; However, investment is one of the determining links that is seriously considered in the international arena.

Describing the experience of participating in an international acceleration program in Poland, Sadri said: About four to five years ago, while attending various events in other countries, we got acquainted with a program that accepted games from different parts of the world. We applied to participate in this program, passed the judging process, and finally our product was selected. To participate in this course, I lived in Poland for a year and during this time, we received a variety of support that was rare in our work experience.

By comparing the support mechanism of Poland with the conditions of Iran, he added: In Poland, after the capacity of the game industry and the impact of successful products in this area were noticed, the support for game makers became more serious. In that country, an institution with the mission of supporting various industries also exclusively supports the game industry. One of the support we received was a grant; At least in my experience, I have never seen a similar support in the Iranian game industry.

This activist in the field of computer games continued: Support was not limited to the payment of financial aid. Administrative processes were also facilitated for the legal registration of the company and the start of operations in Poland. After that, it was possible to attend specialized exhibitions by receiving a free booth, and we were able to participate in one of the most important events of the world's game industry in Germany.

Referring to the difficulty of introducing Iranian products in the world markets, Sadri said: "It is very bitter for me that an Iranian game maker has to introduce its product under the flag of another country in order to be seen in the international exhibition." Some Iranian game makers also operate in other countries and face such conditions to be effective in the global market. I hope that a day will come when all these game makers will be able to present their products with Iranian identity and the Iranian flag in international events.

Emphasizing the importance of attending international exhibitions, he said: Iran had a pavilion in one of the most important events of the world's game industry in the past years; But this presence has not continued for several years. Returning to such events can provide the context for extensive business interactions. If a number of game makers are supported to attend these exhibitions, there will be a good opportunity to introduce the products and establish a relationship with publishers and international activists.

Referring to financial support in some European programs, Sadri added: In the European Union, there are also mechanisms for financing the game industry, in some of which, selected companies can receive up to 200,000 euros in grants. In our experience, these supports did not interfere with product content. In the acceleration programs we experienced in Poland and Lithuania, the focus was on holding workshops, training, facilitating the activities of companies and connecting game developers with publishers.

Referring to the difference in the view of foreign investors with some domestic experiences, he clarified: In these programs, they tried to increase the conditions of activity and the probability of success of game makers, not to change the content of the product at the request of the investor. In my opinion, this approach relies on the long-term capacity of the gaming industry; Because a successful product can create a significant economic effect for the country.

Referring to the export capacity of computer games, Sadri said: In a situation where economic activity and international trade are facing various restrictions, computer games can be one of the country's most important export opportunities. These products have the ability to be supplied to global markets and for their export, compared to many physical goods, there is no need for moving and similar logistics infrastructure.

unpaid financial promises; A factor to weaken game development teams

Saman Kazemi, an expert and expert in the field of computer games, referring to the experience of receiving internal support, said: Before financial support was introduced, our team's activity was going along its own path; But things changed after promises of huge investments were made to advance the project. In the end, these promises did not reach the payment stage, and reasons such as management change or difficult economic conditions were proposed to explain this situation.

Kazemi added: In such a situation, not only the support that was expected was not realized, but also the activity process of some teams was damaged and a number of studios were closed or liquidated. There is another example where the award of a game studio was paid about a year and a half late; The incident that followed led to the non-continuation of the activities of that group.

Referring to the problems of the teams based in different cities of the country, this expert in the field of computer games said: game production is a difficult process by itself, and when problems such as internet outages are added to it, it will be more difficult to continue the work. This can create additional pressure for teams operating outside of the main hubs.

Referring to the experience of some European countries in supporting small companies, Kazemi said: In Sweden, there are mechanisms based on which financial resources from corporate taxes can be used to support small businesses and complete their projects. Of course, economic activity in this country also has its own tax difficulties, but allocating resources to the development of small companies can motivate them.

Referring to the change in Iranian audience's attitude towards buying computer games, he said: When we started our activity in 2006, paying money to buy games was not yet accepted among a significant part of the audience. This issue was more difficult for Iranian games; Because some audience asked why they should pay for an Iranian product, while they have access to foreign games for free. These conditions have changed somewhat in recent years and paying for games has become more accepted.

Kazemi explained about the experience of launching an Iranian product in the international market: Since 2020, we launched one of our Iranian projects in an international market and we encountered feedback that was important for us in evaluating the product. Inside the country, sometimes the mere fact that the game was Iranian made it praise, but foreign audiences and critics evaluated the product with professional standards and in comparison with international games. This experience made us re-examine some of the features that we previously considered to be our strengths and fix our weaknesses.

He continued: Today, we are trying to make our products capable of competing with international games in terms of quality. Despite this, gaming is still not recognized as a serious economic and cultural activity in a part of the decision-making space. For example, in one work experience, despite negotiations for investment, we finally heard the answer that the product in question is just a game. This view ignores the effort and time of a group of expert forces spent to produce a cultural product.

Referring to the economic dimensions of this industry, this expert in the field of computer games said: In the world, some game products have generated hundreds of millions of dollars in income in a short period of time. Comparing such capacities with a limited look at gaming shows that the economic importance of this area is still not properly understood in part of the domestic decision-making space.

In the end, Kazemi emphasized: Iranian game makers have the ability to be present in international markets in terms of knowledge, ability and production capacity; But the realization of this capacity depends on the provision of suitable conditions for activity, access to the market and effective support for producers.

specialized media; An economic link that is ignored in the chain of the game industry

Meisham Khalili, a media activist in the field of computer games, referring to the role of specialized media in the economy of this industry, said: Game development is a long-term and expensive process, and usually after the product is released, it is clear how much the game has the capacity to generate income. Therefore, the economics of this industry cannot be limited to the game maker, publisher, product launch site, or e-sports; Specialized media are also one of the important links of this chain.

Referring to the economic capacity of specialized media, Khalili added: These media are not the only places where advertisements are published, but they are the infrastructure that the private sector has created for the formation of trust between the media and the audience over the years. For example, a specialized gaming media can have about 22 million page views and 6 million users per month. This capacity is directly related to the community of audiences who pay to experience the games.

Explaining the function of the media in the process of product launch, he said: In many global markets, after the release of the game, companies organize a campaign to introduce the product to the media, and the media also review it independently. By using this information, the audience can make a more informed decision about purchasing the product. In such a structure, in addition to helping the game to be seen, the media plays a role in the formation of the market and the relationship between the producer and the consumer.

This media activist continued: The idea that specialized media cannot affect the sale and recognition of a product is not an accurate perception. Even globally known products use the capacity of media for introduction and marketing. This shows that different circles of the game industry are dependent on each other and the lack of effective communication between them can hinder the development of the market.

Referring to the importance of independent media in introducing smaller productions, Khalili said: The media can help the visibility of games that have limited financial and advertising resources compared to larger products. On the other hand, independent review helps to strengthen informed purchase and provides the basis for transferring the concerns of industry activists to society and officials.

He added: If independent media are weakened, the audience will be exposed to advertising content and the possibility of accessing independent criticism will decrease. In this situation, the game maker may rely solely on advertising methods instead of using the media to introduce the product and receive professional feedback; While independent criticism and media demands are necessary for the health and development of the industry.

Referring to the economic difficulties of specialized media, this media activist stated: Media economy in the game industry has received less attention. Specialized media need stable income to cover their expenses, but the restriction of access to some foreign advertising markets and the difficulty of earning foreign currency have hampered their activities. As a result, part of the media's professional capacity is spent trying to survive and provide current expenses instead of developing specialized content.

Referring to the consequences of Internet restrictions on the activities of media and game makers, Khalili stated: Internet outages can destroy international opportunities. In some cases, large companies have announced their readiness to talk with Iranian activists and review their products, but communication restrictions have canceled these interactions. Also, some game developers have faced serious difficulties to transfer demo versions or update their products.

He added: Internet restrictions are not the only issue of daily communication, but can also hinder the possibility of product supply, communicating with foreign audiences, conducting interviews, media activities, and using business opportunities. This situation has direct effects for an industry whose important part of the market is formed in the digital space and beyond geographical boundaries.

In the end, Khalili emphasized: If independent media do not have a clear economic position in the game industry, this industry can continue to produce products, but one of the most important ways to be seen, product recognition and communication with the audience will be lost. The media cannot be expected to be the voice of the gaming industry, but when calculating the economy of this industry, the role and position of the media itself cannot be ignored.

A large audience market does not become a sustainable opportunity without business infrastructure

Mohammad Reza Mostafavi, an activist in the computer games industry, pointed to the legal and economic barriers to the activity of game makers in Iran and stated: One of the issues that has been talked about for years is the observance of intellectual property rights. In the follow-ups we did with some officials, we repeatedly heard the answer that the existing conditions are the same and it is not possible to change them. Such an approach makes a part of market problems accepted as an unchangeable situation.

Pointing to the difficulty of financing game production, Mostafavi said: Game makers sometimes spend money from personal resources to release their products and put aside part of their life priorities in order to complete the project. This path is not limited to the efforts of one person, but a group of specialized forces spend their time, energy and financial resources to produce the product; While there is no guarantee of investment return.

By distinguishing the different parts of the game market in Iran, he added: In this industry, there should be a connection between the consumer market, the players' community, and the business infrastructure. At one point, Iranian companies could cooperate with foreign companies to distribute products, but this possibility has been limited. On the other hand, a part of the audience faces more obstacles to access the main games due to the increase in the cost of buying foreign products.

Referring to the difference in production conditions for PC and mobile phones, this PC game industry activist said: Game makers in the mobile phone market have more direct access to the domestic audience, but operating in the PC-based PC game market, especially for international distribution, has more difficulties. In such a situation, some producers have to define the structure of their activities in other countries in order to enter the world market.

Mustafavi continued: Facilitating mechanisms are needed to register a company abroad, perform tax affairs, use specialized services, and attend international festivals and exhibitions. The lack of proper access to these services increases the cost and complexity of the activity. Meanwhile, in order to enter the global market, the manufacturer, in addition to making the game, must also manage legal, commercial and executive issues.