Andrei Yarantsau: A time will soon come when news will spread more quickly in Cyprus than in Silicon Valley

Andrei Yarantsau, CEO, Pump Games describes Cyprus as a rising games hub, suggesting that a time will soon come when news will spread more quickly in Cyprus than in Silicon Valley.

However, he also suggests that specific steps be taken for the island to continue to grow as an industry hot spot.

Speaking to GOLD magazine as part of a cover story featuring 18 of the top gaming developers based in Cyprus, Yarantsau reveals more about why his company chose the island as its base. He also talks about what makes a successful mobile game and comments, more widely, on the local and global industry.

How did the focus on mobile gaming, particularly centred around casual games, come to define your game development strategy?

We believe that casual players who remain loyal to a genre for years still desire better graphics, new gameplay mechanics and engaging content, similarly to how people occasionally want to upgrade their old car for a brand-new, modern-looking one. Thus, we chose gaming genres in which we believe there are few new high-quality products to stand out and find our users.

Walk us through your most successful titles. And what would you say makes a successful mobile game?

A successful mobile game now is not just a great product with strong basic retention metrics but also a marketing and live-ops machine, capable of operating huge blocks of user data, carefully analysing and A/B testing the marketing funnels and various player segments. Our most successful product was the farm with expeditions. By building live-ops and a large content team, we were able to improve the product’s initial monetisation metrics by 3-4 times. This, in turn, made it possible to purchase quite a lot of traffic and the game firmly took its place as a genre leader. We are now experimenting in other directions, recently releasing a colouring book app, called Color a Day. We are carefully studying advertising monetisation to establish a sustainable economic model alongside subscriptions and in-apps. We’re looking for non-gamers who seek simple entertainment to relax, unwind or spend time – in general, we see great potential in games that look more like apps.

Over the past five years, the games market has witnessed substantial growth, reaching US$187.7 billion in 2023 and is projected to hit US$212.4 billion by 2026, with mobile gaming taking the lion’s share. What major factors have fuelled the industry’s growth, particularly in mobile gaming?

These factors stand out: the ongoing growth (although slower) of mobile devices’ install base; engaging other audience segments, e.g. senior players; the constant evolution of retention and engagement mechanics; and the rise of new monetisation models, e.g. in-game ads, which ensured the rapid growth of hyper-casual and hyper-core games. Investors are also moving quickly, with the number of game funds increasing by several times over the past few years; for a long time, it was extremely difficult for small gaming teams to raise a seed round. More importantly, co-founding companies have started to emerge. It is a new phenomenon, differing from classic investment funds by really working closely with startup founders in all areas, strengthening their product, marketing and technological expertise, which dramatically increases the product’s chances of success.

How have privacy rules, such as the EU’s GDPR and Apple’s Identifier for Advertisers (IDFA), impacted your operations, and how have you adjusted to them?

Even though I understand why platforms regulate personal data usage, I still feel fake and repetitive every time I give or deny permission for another app to use my data. But because these changes touched the whole market, everyone was in the same position and slowly got used to it. Before the IDFA, it was easier to buy traffic with higher precision since there were appropriate tools for targeting users. Now everyone must experiment more in performance acquisition, which automatically leads to an increase in the volume of misleads (to which the audience responds well) and an intensification of the platforms’ fight against misleads. In general, it looks like advertising platforms were a huge financial winner, but the gaming industry has suffered from such actions, although for ordinary players nothing much has changed.

In recent years, several mobile game companies have relocated to Cyprus. What factors have driven this migration?

Traditionally, Cyprus looked attractive due to its favourable tax regime, the ability to settle in the EU, the widespread use of English and its wonderful nature. In the last few years, though, several strong new reasons have emerged. Firstly, the TechIsland association was created as the voice of the business, allowing the Government and the IT business to talk to each other. Secondly, the community of mobile apps and game developers is actively growing and, as a result, people visiting Cyprus see the local movement and stay here. I believe the time will soon come when news will spread more quickly in Cyprus than in Silicon Valley. A lot of entrepreneurs and corporate biz-devs are already adding Cyprus to their lists of places they must visit regularly, along with Tel Aviv and Dubai.

What specific changes – in terms of policy, infrastructure development or any other area – do you believe are essential to bolster Cyprus’ growth as a hub for the industry?

Cyprus definitely gains from its unique location and friendly attitude toward professionals who come here. It’s very important that the island stays peaceful and has good conditions to support international IT business. To continue to grow as an industry hub, it will be useful to speed up the addition of online government services, to actively promote STEM education in primary and secondary schools and to invest in the training of IT personnel in universities. All this will have a fairly quick and long-lasting effect for the benefit of the state and society.

(This interview first appeared in the January edition of GOLD magazine. Click here to view it.)