By Hamza Faisal

Pakistan's game developers are quietly building one of the country's most valuable export industries — earning an estimated $400 million to $480 million a year — yet much of that money never makes it home.

According to a report in Dawn's Business and Finance Weekly on Monday, the industry's growth is being held back by the very rules meant to govern it. Exporters must convert half of their foreign earnings into rupees, face caps on incoming transactions, endure slow remittance screening, and pay a 27 per cent tax on the top-ups they use to buy advertising on platforms such as Google and Unity.

Faced with those conditions, many studios have registered companies abroad and now run their finances from outside Pakistan.

A thin-margin business squeezed by the rules

The core problem is arithmetic. A typical game earns a profit margin of only 20 to 25 per cent, industry insiders told Dawn, so surrendering half of all export proceeds for conversion makes little business sense for studios whose costs — advertising, software licences and cloud services — are mostly paid in dollars.

The stakes are significant. Animation, graphics and games account for 10.5 per cent of the $4.6 billion in IT exports Pakistan recorded in fiscal year 2026, according to State Bank of Pakistan and Pakistan Software Export Board data cited in the report. Independent estimates put the figure higher, at $500 million to $600 million, and growing.

Syed Bilal Qasim, project director at the Centre of Excellence in Gaming and Animation (CEGA) at the Ministry of Information Technology and Telecommunication, said game development is now the dominant industry in Pakistan's creative-tech sector, with an estimated value of more than $200 million — though he added that the real size is likely much bigger than the published estimates, which range from $200 million to around $450 million.

Mobile leads, and AI is rewriting the playbook

A Pakistan Software Export Board report cited by Dawn shows the market split across mobile, console and PC games, with mobile — around half of the total market — firmly in the lead. That matches the shape of the industry on the ground: Pakistan is home to more than 300 game studios and over 12,000 developers, according to PSEB, and the Express Tribune reported last December that the country ranks as the second-largest mobile game developer in its region, behind Vietnam, employing around 18,000 people.

Artificial intelligence is now reshaping the sector as well. Development cycles are getting shorter, complete games are being built with AI tools by people who are not professional developers, and major platforms are imposing new restrictions and checks on AI-generated games — a shift that could either lower the barrier for Pakistani studios or squeeze them out of storefronts.

What would bring the money home

For now, the industry's message to policymakers is straightforward: the talent and the demand are already there. What is missing is a payments and tax regime that lets studios keep their earnings in the currency they spend them in, and move money in and out of the country without friction.

Until that changes, Pakistan's fastest-growing creative export will keep being booked — and banked — somewhere else.

By Hamza Faisal