LogInA few years ago, the Azerbaijani government recognized the potential of its gaming studios and began actively supporting the industry’s growth.
Azerbaijan is emerging as one of the promising game development hubs, located in the South Caucasus. The market is driven by growing government support and a highly engaged local community. In this report, 80 Level Research Team explores how Azerbaijan is building its game industry, from the first steps of the industry development to government support programs, international partnerships, and future potential.
Azerbaijan’s Emerging Gaming Market
As of 2025, Azerbaijan’s GDP stands at $78.87 billion, reflecting a moderate recovery after previous periods of fluctuation. The IMF's new report forecasts Azerbaijan's GDP growth at 2.3% in 2025 and 2.4% in 2029.
The number of game development studios is rising every year. At the moment, there are over 60 active game studios in the country, with dominating indie sector. Among the most popular ones are AzDimension, Darts Games, Cool Bears, PolyDream Studio, Dynamic Box Studio, and 85 Games Studio.
Farid Haqverdiyev, Founder of AzDimension and Game Сoordinator at Gamesummit:
Our game industry is just starting to develop. You could have said the same thing ten years ago, but now we’re seeing some progress. Back in 2015, there were only two game studios in the country. Today, there are over 30 active developers, including both professionals and hobbyists. Around 10 of them are professional studios, and the number of small teams could be as high as 50.
Global companies in game development are also starting to pay attention to this growing market. For example, Xsolla organized Incubator Program and plans to launch the Xsolla StarNest Academy in the country with the help of the Azerbaijani telecommunications company StarNest and the Innovation and Digital Development Agency (IDDA).
Until 2020, there was little to no institutional or government support for the game industry in Azerbaijan. According to interviews with studio founders and government representatives, the earliest studios like AzDimension and Darts Games operated independently, relying on internal funding, community knowledge, and platforms like Steam to reach international markets.
Nikita Yudin, Project Manager at Innovation Ecosystem Department at IDDA Azerbaijan:
Game studios in Azerbaijan have been driving the market independently for the last 3-4 years. It was hard for them, but now the government has started to recognize their work and is offering support to help them grow faster, including financial assistance.
Is Government a Catalyst for Growth?
In 2022, Azerbaijan integrated game development into its national economic framework via a presidential decree, aligning with its 2022–2026 Socio-Economic Development Strategy. The game development is now officially recognized, ensuring the industry benefits from state programs and funding.
Rashad Azizov, General Director of ARKA:
As of May 2, Azerbaijan officially adopted a classification system for creative industries. This was a direct outcome of the country’s socio-economic development strategy for 2022–2026. Importantly, the game industry is now fully recognized within both national economic statistics and government policy on creative industry support. Various government bodies are already promoting new projects in this sector, and a more systematic approach has emerged in recent years — with roundtables, professional training courses, and new university programs. Today, more players are entering this space, and the Ministry of Culture has formally named the game industry — alongside animation and culture-tech — a strategic priority within its creative industries policy.
While many game development studios in Azerbaijan still rely mostly on their own resources, government support for the industry is growing. Two key players in this effort are the Ministry of Youth and Sports and the Ministry of Digital Development and Transport. The Ministry of Youth and Sports supported over 300 youth organizations, many of which are involved in creative and tech projects, including game development. These efforts are helping to build a stronger foundation for the country’s digital and creative economy.
In 2021, the Innovation and Digital Development Agency (IDDA) was established under the Ministry of Digital Development and Transportation. Its mission is to drive digital transformation and support innovation across sectors, including creative industries and game development.
Besides, Azerbaijani chapter of International Game Developers Association (IGDA) is actively working with IDDA on developing the gaming ecosystem. It focuses on building a strong community, fostering international connections, providing mentorship, and accelerating growth.
Ilgar Alirzayev, Chair of the IGDA Azerbaijan Chapter, Co-founder and COO of Gamepons:
As a non-profit chapter, we primarily rely on government support. That’s why we work closely with the Innovation and Digital Development Agency (IDDA) and the Ministry of Culture of Azerbaijan. With their assistance, we’ve been able to support the local game development ecosystem and provide free access to our resources and events, making them more inclusive and widely accessible.
We plan to continue this approach into 2026 and beyond, with the aim of not only expanding our local initiatives but also attracting new global gamedev-related companies to our ecosystem.
Moreover, Azerbaijan offers substantial tax incentives within the ICT sector that also benefit game developers and studios.
Technopark Residency Program
Companies specializing in system integration, software design, or development qualify for a 10-year tax holiday, either within Technopark or as registered residents outside it.
They are exempt from:
- Corporate (profit) tax, property tax, and land tax (Technopark)
- Dividend tax
- VAT on imported IT equipment
Grants and Funding
In Azerbaijan, the State Fund for the Development of Information Technologies operates grant competitions to support innovative projects in the ICT sector. Game projects can fit under these categories if they demonstrate technical or commercial innovation.
Farid Haqverdiyev, Founder of AzDimension and Game Сoordinator at Gamesummit:
Back in 2010, the government launched a development plan for youth projects. One of those projects was focused on creating games based on national themes. We developed games inspired by Azerbaijani culture: fairy tales, myths, and folklore. The Ministry of Youth and Sports saw potential in this and funded us to create those types of games. The second initiative came in 2015 from the Ministry of Information Technologies. They offered grants, not specifically for games, but for startup projects in general. These grants covered apps, websites, and games. After those two efforts, government involvement faded for a while. But in the last 2–3 years, things started picking up again.
Thanks to these government initiatives Azerbaijan gaming industry already has some noticeable achievements in talent pool, number of active studios, and industry growth.
Nikita Yudin, Project Manager at Innovation Ecosystem Department at IDDA Azerbaijan:
We started the development of the game industry in March last year. And since then, we have achieved some major milestones:
- The number of active studios has increased from 24 to over 60 in just the past two years, indicating rapid ecosystem growth.
- Currently, the number of talents involved in this industry is more than 500 people. They work in studios or are outsourced in this field.
- According to the latest data provided by Xsolla, the size of Azerbaijan’s gaming market has reached $221 million, underscoring the sector’s economic potential and attractiveness for both local and international stakeholders.
We expect more scaling of the ecosystem by the end of 2026.
What’s Next for the Regional Gaming Industry?
Unique Gaming Ecosystem
Every country has its unique pool of cultural, institutional, and economic conditions, and Azerbaijan is no exception. To have sustainable growth, the local gaming ecosystem should be based on the country’s context rather than be copied from existing models abroad. Of course, best practices from international markets can and should be used, but in a form adapted to the local environment.
The current plan is focused on a nationwide ecosystem that ensures equal access to support for developers across all regions. This includes infrastructure development, funding mechanisms, education, and close collaboration with local and international experts.
Nikita Yudin, Project Manager at Innovation Ecosystem Department at IDDA Azerbaijan:
We are aligning our actions with three key documents: the Socio-Economic Strategy of Azerbaijan 2022-2030, our agency’s charter, and the Regulation on the Use of Funds of the Innovation and Digital Development Agency. Based on these, we are launching several initiatives from IDDA’s side:
- Opening the first publishing company in Azerbaijan. We are already communicating with foreign experts about establishing the company here.
- Creating the first gaming fund in Azerbaijan.
- Systematizing and bringing the Roadshow organization into the process.
-Expanding our partnership with Xsolla, not focusing solely on the academy. Recently, we concluded the incubation program with Xsolla, where 3 game studios received monetary awards ranging from 50,000 to 100,000 AZN.
- Working on launching the hub.
- Aiming to develop the gaming industry in the whole country.
Creative Alliance: Where Games Meet Cinema
Collaboration between film and game development sectors in Azerbaijan has been growing alongside the expansion of both industries. Organizations like ARKA are playing a growing role in integrating games into the wider creative ecosystem.
In many cases, games and films rely on similar skill sets like visual effects, storytelling, animation, and 3D design. This overlap creates a strong foundation for collaboration between the industries. Together, game developers and filmmakers can improve the quality of their content, experiment with new formats, and reach wider audiences through transmedia experiences.
Rashad Azizov, General Director of ARKA:
Collaboration between filmmakers and game developers is not just beneficial — it’s essential.
- Integrating advanced visual effects can improve quality while cutting production costs.
- Games and animation often rely on the same pool of artists, designers, and technical specialists.
- Strong cinematic direction and screenwriting can raise the narrative level of games, making them more competitive internationally.
- Game development also introduces new merchandising and IP monetization opportunities, enhancing the financial sustainability of film projects.
If you are ready to learn more about gamedev potential in Azerbaijan, read our latest report Azerbaijan: A New Gaming Market Worth Investing In for FREE!