Yury Pomortsev: For gaming company registration, Cyprus springs to mind first

“Cyprus often springs to mind first, or at least ranks among the top choices, when considering the registration of a gaming company,” Yury Pomortsev, CEO, Game Garden suggests.

Speaking to GOLD magazine as part of a cover story featuring 18 of the top gaming developers based in Cyprus, Pomortsev notes that there are many reasons why Cyprus has become an increasingly attractive hub for mobile developers, revealing that, for Game Garden in particular, a significant draw was the presence of its partners and investors, GEM Capital.

Pomortsev also reveals that simply creating a high-quality clone isn’t a guaranteed path to success anymore, noting “Users have become much more demanding and discerning, pushing us as developers to offer something fresh, original and high-quality.”

How did the focus on mobile games, particularly in the family-oriented genre, come to define your game development strategy?

Like many developments in the mobile gaming industry over a decade ago – and our studio is gearing up to celebrate its 15th anniversary next year – a lot of our early decisions were guided more by intuition than a carefully planned strategy. We initially developed a game for social networks and then decided to try our hand at porting it to mobile platforms. Just like that, six months later, we launched our first version in the store. Another six months went by and we were earning several hundred thousand dollars a month, all without investing a penny in marketing. Looking back, it may have been a stroke of beginner’s luck but it was this very luck that steered us to our future direction.

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

Our first successful game was Fairy Farm, launched in early 2011. It was a classic family farm game with a fantasy twist, a popular genre at the time. We continued in this direction, creating more expansive simulators of fairy-tale kingdoms, such as Farmdale and Fairy Kingdom. After these, we released 7-8 more or less successful games, leading up to our potential magnum opus – Florescence.

What makes a game successful? I must say it’s a great question and one that I’d love to have a definitive and foolproof answer to! From our experience, we’ve learned that simply creating a high-quality clone isn’t a guaranteed path to success anymore. Users have become much more demanding and discerning, pushing us as developers to offer something fresh, original and high-quality. That’s why Florescence isn’t just another merge game; we incorporated Role-Playing Game (RPG) elements to provide a new, engaging meta-gameplay while maintaining the familiar core gameplay. Furthermore, the game’s release is just the beginning. A successful game must evolve into a long-term service, making live-ops critical. Success requires providing players with enduring, sustainable and continuously engaging content in addition to the usual core gameplay. This approach is complex, resource-intensive and costly but it’s indispensable. Finally, understanding your audience is key. Pay attention to their reactions, preferences, suggestions and mindset. Utilize every tool at your disposal, from marketing and analytics systems to engaging closely with the community and conducting surveys. You’ll often be surprised at how differently your project is perceived by your users compared to your own views. Hence, a reliable and ongoing feedback channel is extremely important.

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?

The last five years have been akin to a rollercoaster ride. During the COVID-19 period (2020-2021), the market saw phenomenal annual growth of 25-30%. However, in the past year and a half or so, the mobile gaming industry has been going through some rough patches – a repercussion of the astonishing growth in previous years. Regrettably, news of layoffs has become almost a daily occurrence, and studio closures are reported nearly every week. Since early 2022, there’s been a significant downturn in investments and a notable decrease in M&A deals. This is the fallout of an overheated market. Despite this, there is a silver lining: indicators now suggest that the stabilisation process, costly though it has been, is nearing completion, and we anticipate a return to standard growth shortly. On a broader scale, the mobile market segment remains vast in terms of financial value. The number of mobile device users continues to increase, markets are evolving, development tools are advancing, and, fundamentally, people’s desire for entertainment is ceaseless.

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

Apple’s recent decision has struck the market a heavy blow. The effectiveness of user acquisition has drastically dropped, as iOS marketers now find themselves almost working blind. For example, they struggle to distinguish between acquired and organic traffic. This approach was rather heavy-handed and didn’t fully account for the interests of all parties. We remain hopeful that Google will come up with a more nuanced solution. Meanwhile, the industry is slowly but surely adapting to these new rules of engagement. Emerging solutions are beginning to allow for more effective user acquisition. Mobile Measurement Platforms (MMPs) like AppsFlyer and Adjust are incorporating support for newer versions of the SKAD Network, alongside their own algorithms, which help to evaluate traffic efficiency more precisely. Improvement is also seen in various Supply-Side Platforms (SSPs) and Demand-Side Platforms (DSPs), which now include internal probabilistic models for conversion tracking.

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

Over the past decade, Cyprus has increasingly become an attractive hub for mobile developers. The island has drawn a diverse range of companies, from small studios to market heavyweights, and has seen a rise in industry-related events. This trend appears entirely logical due to a confluence of factors: Cyprus boasts a business- friendly tax system, straightforward processes for company registration and bank account opening, a robust and well-established IT community, plus an excellent climate and a well-developed infrastructure. Cyprus often springs to mind first, or at least ranks among the top choices, when considering the registration of a gaming company. For us personally, a significant draw was the presence of our esteemed partners and investors, GEM Capital, whose office is based in Cyprus. Being closer to them is highly beneficial, given the immense support and assistance they provide us.

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?

In addressing the practical challenges we’ve encountered, like high rental costs and significant resident taxes, it would be immensely beneficial if the Government could establish a sector-specific cluster. This cluster could offer various incentives, such as payroll tax relief, and provide essential physical infrastructure. There are already successful precedents for this approach. Moreover, Cyprus is home to many large companies that could provide insights into effective strategies. Implementing these strategies could attract more studios and investors, which would positively impact both the nation’s economy and the gaming industry overall.

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