The video gaming industry is thriving in Iceland, with numerous companies developing products

The gaming industry has grown by leaps and bounds in Iceland. There are several reasonably large companies currently operating in Iceland, providing good jobs in creating innovative products. The industry’s growth can, in part, be credited to increased government support, such as higher reimbursement of research and development costs and incentives for individual investors to back startups. However, the Icelandic population itself is the biggest driver for innovation in the sector. In Iceland, 99% of inhabitants use the internet, the highest of any country in Europe. Iceland is a technologically advanced country, with good universities that produce an intelligent and productive workforce for the video game industry.

The people in the Icelandic gaming industry are a close-knit community who collaborate extensively regarding both knowledge sharing and investment opportunities. “Bigger companies like CCP have paved the way and made solutions that helped entrepreneurs who have come since”, said Jóhann Ingi Gudjonsson, Marketing Manager at Solid Clouds. “In Reykjavík, we have bi-weekly gatherings, through Game Makers Iceland, where we share projects, ideas and solutions – making for a think tank of sorts. Iceland also has a very competitive government incentive programme that lessens the risk of developing new products and supporting entrepreneurs.”

There have been many new opportunities in the gaming space, which makes it a very appealing market. “People of all ages and backgrounds play video games, and the industry is exciting in the sense that, even the most niche groups still consist of a large number of potential customers”, said Ólöf S. Magnúsdóttir, Producer at Arctic Theory. “We’ve seen in the past few years that an increasing number of people look for more social experiences in video games, and this has been especially true during the Covid-19 pandemic.”

It’s an exciting time for the gaming industry in Iceland. Below are profiles of a few companies making waves in the sector.

Solid Clouds

Solid Clouds is a Reykjavík-based video game developer, established in 2013 by cofounders Stefán Gunnarsson and Stefán Þór Björnsson. The company creates deep and meaningful gaming experiences for PCs and mobile devices, utilising a team with diverse and multidisciplinary talents. The company has 22 employees but has been growing lately as they are working towards fulfilling ambitious goals and entering new markets.

Cofounder Stefán Gunnarsson

Solid Clouds released its first game, Starborne: Sovereign Space, in 2016. The game is a massively multiplayer online real-time strategy game in gigantic maps with up to 500 players vying against each other for galactic dominance. Players will forge alliances, plot, scheme and fight their way to victory in unique handcrafted maps – each offering different challenges and victory conditions. The game has enjoyed success and was recently called one of the best strategy games of its genre by PCGames magazine.

“We are currently working on our first mobile game, Starborne: Frontiers, which opens us up to a market of roughly 2.2 billion gamers. Frontiers is a persistent MMORPG, where you navigate a web of complex alliances and conflicts among the stars. The game allows players to explore the dazzling, expansive universe while continuously surprising and captivating them. Starborne: Frontiers takes place in the same universe as Sovereign Space but offers radically different gameplay” said Ívar.


Miðeind, which focuses on Natural Language Processing (NLP) and Artificial Intelligence (AI) applications for the Icelandic language, has launched a new crossword game, Explo. Explo is based on the very successful Netskrafl, a crossword web game for Icelandic, which over 20,000 Icelanders have played at some point and that now has about 7,500 monthly users. That amounts to about 2% of the population of the country. Miðeind has ten employees and is continuing to grow.

Vilhjálmur Þorsteinsson, founder of Miðeind

Explo (and Netskrafl) are classic crossword games with a set of letter tiles in a virtual “bag”, and players form their crosswords using these tiles. For Netskrafl, Miðeind created a new tile bag for Icelandic using computer simulation to optimise the letter frequencies and scores. For Explo, they did the same for the English tile bag and designed a better game board that is downward diagonally symmetric instead of the classic centre-symmetric one.

The company has been operating in NLP and AI since 2015. It is a participant in the Icelandic Government’s 5-year Language Technology Programme, intended to help save the Icelandic language from digital extinction. The technologies the company develops will hopefully also be beneficial for other minor, low-resource languages of the world.

Apart from Explo, which will be brought to market soon, Miðeind has developed services such as a machine translation website ( for translating between Icelandic and English, a spelling and grammar checking website (yfirlestur. is) for annotating text, and Embla, a voice assistant app for smartphones that can answer questions in spoken Icelandic.

Arctic Theory

Arctic Theory was founded to bring an innovative and exciting virtual world to life, giving players a unique take on the multiplayer space by focusing on collaboration over conflict. The founding team consists of four industry veterans, who have decades of experience building multiplayer games and have been an integral part of creating some of the most ambitious games on the market.

The Arctic Theory team in Reykjavík

Founded in June 2020, Arctic Theory’s team consists of nine people and is actively hiring to grow the studio. Arctic Theory is currently working on their, as yet, unannounced debut title. “We believe in open development, so we have a live prototype available on Steam called Project Existence as part of that philosophy. This proto-type acts as our testing grounds where we frequently implement and try out features and technology in a live environment. We’ve built a small and active community around the prototype which helps us tackle issues, validate our ideas and ‘find the fun’ much sooner than if we kept things internal.”

Early next year, Arctic Theory will be announcing its debut title. “We’re actively growing the team and looking for the top talent, so we’re very excited for the future of Arctic Theory,” said Ólöf, Producer at Arctic Theory.

It is possible to download Project Existence for free on Steam.


Parity is a video game company founded in 2017 by CCP-veteran, María Guðmundsdóttir. The company is based on the principle that the gaming industry craves more diversity in development and the products themselves. They employ 14 people, and aim to create games with more parity and variety, which appeals to a broader range of people. “We at Parity are currently working our first title, Island of Winds, a story-driven adventure game inspired by 17th century Iceland”, said María.

The team members of Parity in their Reykjavík office

In Island of Winds, the story revolves around the heroine, Brynhild, an herbalist who returns home after a long journey, only to find her clan missing and the island under a strange hex. Players are tasked with solving the mystery of the missing family and the peculiar hex through missions, puzzles and empathy-based combat filled with Icelandic history, folklore, and mythical creatures. “Island of Winds is a game with an astonishing open-world environment that explores the themes of self-doubt, violence, regret, and empathy”, said María.

Parity just launched its first trailer that got over 100,000 views in the first 24 hours. “The next step is to continue our marketing campaign, start with beta testing, launch our second trailer, and develop our game”, she said. “Island of Winds will launch on PC next year and soon after on other platforms.”

1939 Games

Icelandic game Developer 1939 Games published the digital collectible card game, KARDS, a game set during WWII. The game has been designed as a cross platform game and was released for PC on Steam. The company, which has 17 employees in Reykjavík and Helsinki, was founded by brothers Ívar and Guðmundur Kristjansson, both veterans of the gaming industry. Ívar was one of three original founders of CCP and CEO of the company when it launched the hit game MMORPG EVE-Online back in 2003.

Ívar Kristjansson

The company recently completed a $5.3M funding round to finalise the development and launch of the mobile version of KARDS. “The biggest opportunity lies with the mobile version, so the future is exciting”, said Ívar, now CEO of 1939 Games. “Currently we only offer KARDS for PC but we are working on the Mac version and the mobile version. We will be busy with KARDS for the next 18-24 months to reach its full potential but after that, we have several ideas for our next game.”

1939 Games has some untapped opportunities in markets like South Korea and Japan that they are exploring right now but the biggest opportunity is with the mobile launch next year. KARDS has already attracted more than 700,000 players and generated about $4M in revenue. “Games like KARDS can expect to add 5-10 times more players to the game after the mobile release so the coming year will be super exciting,” said Ívar.

Directive Games

Directive Games was founded by industry game veterans in Shanghai in 2014 and today, maintains a global presence in China as well as Iceland and the United States. The company has grown significantly over the past three years and now has 17 employees in Iceland. Directive Games’ roster of titles includes Super Kaiju, The Machines, and Ready Player One: OASIS. “Right now, we are focusing on the game, The Machines Arena, a fast-paced PvP cross-platform multiplayer competitive game”, said Þorgeir Frímann Óðinsson, general manager at Directive Games. “We are still testing the game, and as part of that testing, we had a global tournament a month ago where 16 teams competed. It was streamed and 150,000 people viewed it, which is great for it still being in alpha mode.”

Þorgeir Frímann Óðinsson, general manager at Directive Games

The gaming industry in Iceland has seen a boost from the government in terms of tax incentives and rebates. “All startups in the IT industry have benefited immensely from these measures”, said Þorgeir, adding that this should not be taken for granted. “The next problem the industry will face is a scarcity of human resources. We need to bolster our education system when it comes to STEM courses and a more immediate goal would be to attract foreign talent to the country.”

Myrkur Games

Myrkur Games is a video game developer established in 2016 and based in Reykjavík. The company, which has 24 full-time employees, is currently developing an ambitious new action-adventure game for PC and consoles, called Echoes of the End. “We make high-quality actionadventure games for PC and consoles”, said Halldór S. Kristjánsson, CEO and Game Director at Myrkur Games. “We are currently working on Echoes of the End and it will be the first in a trilogy of games in the series.”

Halldór S. Kristjánsson, CEO an Game Director at Myrkur Games

The company’s journey began when it was set up in 2016 by three founders who met in University. “We started working on game technology, but soon pivoted towards our passion, game development”, said Halldór. “We saw a huge opportunity in game technologies that would allow smaller studios to do so much more than anyone could have imagined.” Indeed, it’s an exciting time to be in the gaming industry. “Game technology has vastly changed over the last few years, which has opened the doors for new experiences”, he said. “There are more gamers than ever and the demand for high-quality gaming content is huge.”

As Myrkur Games develops Echoes of the End, the company is looking to increase its staff. “We are currently looking to expand the team by at least 11 more developers by summer 2022,” said Halldór. “Our largest task right now is finding great people and growing our team.”