Israel has long enjoyed an international reputation as a powerhouse of hi-tech and innovation. Yet one of the fastest-growing digital sectors in the world has largely been excluded from the country’s success story: the gaming industry.
Unlike Israel’s cybersecurity sector and broader hi-tech ecosystem, the local gaming scene has struggled to secure consistent, long-term government support. As a result, the state effectively forfeits tens of billions of dollars in potential annual revenue. According to data from GameIS, the Israeli Digital Games Industry Association, the gaming industry generates approximately $10 billion in annual revenue and employs approximately 15,000 people.
The lack of recognition stems largely from dismissive attitudes and limited understanding of the sector, despite its abundance of technical expertise, creativity, and talent. Overlooking an industry that is already active, thriving, and globally competitive represents a significant missed opportunity, not only for Israel’s economy but also for the global gaming ecosystem.
For over a decade, Israel’s gaming industry has operated quietly beneath the radar of economic and governmental oversight. Dozens of Israeli companies have launched successful games for international audiences, generating revenue worldwide and competing in the world's largest entertainment industry. Conservative estimates place global gaming revenues at approximately $200 billion annually, with steady year-on-year growth driven by digital distribution and rising demand.
Consider Finland, a country with a similar export-driven economic profile. Finland has built an effective public support system for game development, including targeted grants for early-stage creators, tax incentives for gaming companies and international investors, and funding programs to help small studios navigate the critical early development phase. The results speak for themselves: internationally recognized success stories, growing clusters of small and medium-sized companies, retention of skilled talent, and substantial tax revenue.
Israel need not look far for examples of local success. Companies such as Playtika, Plarium, Moon Active, Candivore, and CrazyLabs began as small start-ups and now lead the Israeli and, in some cases, global gaming industry. Importantly, their growth occurred despite, rather than because of, government policy. Funding primarily derives from export revenues from audiences in North America, Europe, and Asia, rather than from the domestic market. Many small studios must navigate projects on a case-by-case basis, lacking broad financial support and access to investors.
How can Israel capitalize on its gaming industry?
The solution is straightforward: development grants, tax incentives, investment encouragement, and programs to support early-stage developers. These measures reduce investor risk, allow creators to enter the market more prepared, and significantly increase the likelihood that private investments, both domestic and international, will follow.
Calls for public support in gaming aim to correct a market failure at the earliest and riskiest stage of production. Small studios face substantial upfront costs long before any revenue is generated, making early-stage assistance critical. Initiatives within the industry have demonstrated both demand and the necessary structure to implement local ecosystem support programs. What is missing is scale and long-term commitment from Israeli authorities.
Israel’s gaming industry is not a story of failure; it is a story of success despite the obstacles. Talent exists here. Global demand is proven. What remains is a national policy to fully unleash the country’s potential.
The writer is the chairman of GameIS