Turkey has been going through a serious economic crisis for several years. Last month, inflation reached an annual rate of 73.5% – the highest level since 1998. Ankara’s credit rating has plummeted.

Unlike President Recep Tayyip Erdogan’s financial failure, Turkey’s mobile gaming industry has seen unprecedented growth and prosperity in recent years. According to a new report by research firm Sensor Tower, Turkish mobile phone makers’ revenues totaled $160 million in the first quarter of 2022, a 37% jump from the same quarter in 2021. The report shows that the Turkey overtook Italy to become the fifth largest mobile game maker in Europe by total user revenue (after Germany, UK, France and Russia, respectively).

In particular, Turkey has become a hotbed of hyper-casual games, games with simple game mechanics designed for extremely short turns. Alictus, one such company, was recently acquired for $100 million by SciPlay, a social casino company that employs more than 200 people in Israel.

“Casual and hyper-casual gaming is an area that generates $20 billion of the estimated $100 billion generated annually by the mobile gaming industry,” Noga Halperin, CRO of SciPlay, told Calcalist. “To be clear, social casinos are an $8 billion industry. Today, there are nearly 3,000 game manufacturers in Turkey; about 20% of the games that reached the top of the charts in recent years were Turkish games because the hyper-casual field is Not every country that wants to expand globally can achieve that.

“What is interesting about Turkey and which led to the current situation is that the games are part of the culture of the Turkish people,” Halperin explained. “Looking at history, they used to play backgammon, dominoes and other board games, which is related to their culture. Turkey has around 30 million players out of a population of 84 million. Due to their close connection to the gambling world and their ongoing economic crisis – the Turks have tried to open up to the rest of the world.”

Indeed, despite the widespread impact of the economic crisis in Turkey, the country’s mobile gaming sector remains relatively immune to it. The reason for this is the global nature of the industry. Like other software products, while mobile games are developed in Turkey, they can easily reach a global user base, which means that the Turkish gaming industry is largely unaffected by the power of buying from the local economy. However, the economic crisis in Turkey is affecting the cost of employing game developers in Turkey, whose salaries are eroding with the push of inflation. According to the Glassdoor website, game developers in Istanbul earn between $980 and $2,800 per month, much lower than game developers in Western countries.

Turkey’s economic instability explains the emphasis on the hyper-casual genre. Unlike PC or console games, which require a colossal budget and a long development time, the development of mobile games – and in particular hyper-casual games – takes little time and requires relatively modest budgets. Due to the risk associated with the Turkish economy, venture capitalists have preferred to invest in companies that can bring products to market quickly and generate a return on investment in a short time, which means that the hyper-casual is not just a genre but a business model in itself.

The first indicator of the Turkish mobile game industry was Peak Games, established in 2010. Peak Games can be crowned as the greatest success story of the Turkish mobile industry to date. Pick has become the first game company in Turkey to become a unicorn, a start-up worth over $1 billion. In 2017, mobile maker Zynga acquired Peak’s card game division for $100 million. Three years later, Zynga acquired the entire company for $1.8 billion.

“Peak Games is like the politics of Turkey,” says Eitan Reisel, founder and CEO of venture capital fund VGames. Like Playtika, veteran Peak Games has spawned more gaming companies. “Peak is the parent company in Turkey. It has been home to many businesses and entrepreneurs in the industry.” Some of the company’s former employees founded Dream Games in 2019. In January, the company raised $255 million, valuing $2.75 billion, nearly three times the value of Dream Games six months earlier. Spyke Games, another game company, raised $55 million that month; Four of its five founders are former employees of Peak Games.

Reisel added that the knowledge base for the booming gaming industry is academia: “There are amazing universities in Turkey. There’s a lot of innovation there, and not just in the industry. of the game. Some users enjoy and consume a lot of content. They have very creative minds. They are innovative artistically as well as in the gaming experience. The Turks are probably better than us in this area,” he admits “If we’re the country with the monetization knowledge, they’re the country with the art and game design knowledge. We have made an investment there that we have not yet disclosed. The world’s largest investors have already invested in Turkey, for example the NFX fund (by Gigi Levy-Weiss). From a geopolitical point of view, such collaborations will only do good for Turkey and Israel.”

One of Turkey’s advantages in the global market is an organizational culture similar to that of the West. This contrasts with other Asian countries, where cultural gaps can be difficult to bridge. “In our relationship with Alictus – which is the best example I can give – I was shocked that the corporate culture was similar to ours,” Halperin said. “They started working remotely before the pandemic started, so it was easy for them to continue, but their approach allows employees to create and be innovative. It’s a management that trusts employees. On the other hand, they also have company meetings, which are aimed at bonding, helping employees to bond and work together remotely. They are very bold, it’s beautiful to see. It’s very similar to our world.