Inside Cyprus’ gaming boom — interview with Ilya Karpinskiy

The Cyprus Mail recently had a chat with Ilya Karpinskiy, a seasoned veteran in the gaming industry, both as a game creator and investor.

During the interview, we discussed his journey in the gaming industry, the increasing number of game studios on the island, as well as Cyprus’ growing prominence as a technology and business centre.

CM: Could you share some insights into your background and the companies you’ve been involved with?

Ilya: Certainly. My journey in the video game business began in 2004 when I started working as a developer and project manager. Initially, I embarked on a solo project and following that, I joined Nival Network, one of the oldest video game developers in Eastern Europe, where I stayed until around 2012.

During my tenure, we developed a number of very popular premium games, including Heroes of Might and Magic V, ventured into free-to-play MMO games, and licensed numerous titles for distribution in Europe. After Nival Network, I joined VK, a large public multi-vertical corporation where I was responsible for third-party development, strategy, and business development of My.Games – the gaming division of the group.

At My.Games I co-founded MGVC, one of the first 5 gaming-focused venture investment firms in the world, and later together with Maria Kochmola (ex Investment Director, employee number 1 at MGVC) and Ilia Eremeev (ex Executive producer, employee number 3 at MGVC), we founded The Games Fund – an early-stage gaming VC fund based in Cyprus and New York.

Alongside The Games Fund, I am also the founder of Owlcat Games, a premium game developer headquartered in Cyprus, where our team of nearly 100 staff develops PC and console games. Our recent releases include titles like Pathfinder: Kingmaker and Warhammer 40k: Rogue Trader, among others.

CM: Could you elaborate on the trend of relocating video game developers from Eastern Europe to Cyprus and the advantages it offers?

Ilya: The trend of video game developers relocating to Cyprus began around a decade ago, with companies like Wargaming among the first to do so.

Cyprus offers a favourable environment for IT and video game developers, supported by government initiatives which make it more straightforward to establish and operate businesses, attracting companies and talent not only from Eastern Europe but also from Central European countries like Poland and Germany.

Owlcat’s experience reflects this: we attract and relocate talent from all around the world, which helps us develop games with global appeal.

CM: What’s the significance of Cyprus for venture investments, particularly in Eastern Europe?

Ilya: Cyprus holds a unique position for venture investments, especially for companies originating from Eastern Europe. Its favourable legal framework, particularly for SPV structures (special purpose vehicle) and distributed teams across Europe, makes it an attractive location.

Operating under English law provides transparency for founders, LPs, and investors, a critical factor in venture capital.

While The Games Fund invests in various jurisdictions, we prefer Cyprus for its effectiveness and solid legal framework. It serves as an excellent base for investments, aligning with our goal of transparent and efficient business operations.

CM: How do you view Cyprus in comparison to other European countries for running businesses and attracting talent?

Ilya: In my opinion, Cyprus stands out as one of the best locations for running businesses in Europe. Its ability to attract talent from diverse countries distinguishes it from other European nations. Unlike countries like Germany or France, where establishing businesses and relocating talent can be cumbersome and costly, Cyprus offers a more streamlined approach.

Its strategic location, quality of life, and most importantly, the community, make it an appealing destination for businesses aiming for global operations. Moreover, its proximity to major markets enhances its attractiveness for companies and talent alike.

CM: Could you shed some light on Owlcat Games and its focus on developing PC console RPG titles?

Ilya: Owlcat Games specialises in developing premium PC console RPG titles, catering to the global market.

Based in Cyprus, our team is committed to creating high-quality entertainment for gamers worldwide. We’ve established our office in a picturesque location, fostering creativity and collaboration.

Additionally, we’ve created spaces for events and training, not only for ourselves but also for our portfolio companies. Our goal is to contribute to the gaming industry’s growth, both locally and globally.

CM: Shifting gears, could you outline the criteria and approach of The Games Fund in selecting and supporting portfolio companies?

Ilya: The Games Fund adopts a comprehensive approach to selecting and supporting portfolio companies. We take a human approach, prioritising the founders’ vision and expertise, recognising them as pivotal in the success of video game businesses.

Whether developing games for PC, console, or mobile platforms, we assess the company’s potential to achieve significant milestones, such as selling over 1 million copies of premium games or reaching monthly revenue targets for free-to-play titles.

Our support extends beyond financial assistance, as we provide guidance, strategic insights, connections and assistance in fundraising to help companies realise their potential. Additionally, we emphasise the importance of exit strategies, ensuring alignment with the founders’ long-term objectives.

CM: Could you share your perspective on the challenges and opportunities associated with developing free-to-play games versus premium titles?

Ilya: Free-to-play games and premium titles present distinct challenges and opportunities. Free-to-play games require a robust marketing strategy to acquire and engage users effectively.

They also involve ongoing service management, necessitating expertise in analytics and user engagement.

Conversely, premium titles demand a focus on high-quality content creation, often with substantial investment and uncertain returns.

Both approaches have their merits, dependent upon the founders’ ambitions and market dynamics. Ultimately, our goal is to support companies in achieving success, irrespective of their chosen model.

CM: Lastly, could you elaborate on your vision for The Games Fund and its future initiatives?

Ilya: In a nutshell, it’s to become the number one gaming VC. We’re not ‘The Games Fund One and done’.

This year, we’re doubling down on our commitment to fostering innovation and talent in the gaming industry, both locally and globally, connecting capital with where it can make the most impact for game-makers and gaming content.

We’re dedicated to nurturing talent, facilitating growth, and driving innovation in the gaming sector for years to come – and Cyprus will play a key part in this.